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150,000 jobs lost in Nigeria’s oil industry – PENGASSAN

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  • As Buhari suspends loans deduction-, granting huge relief to States

The Nigerian oil and gas industry recorded a loss of about 150,000 jobs in 26 months to February 2016, the Petroleum and Natural Gas Senior Staff Association of Nigeria has said.

The National President, PENGASSAN, Mr. Francis Johnson, noted that there had been massive and unprecedented loss of jobs in the oil and gas industry globally and in Nigeria.

Johnson stated this in Abuja at the Save Nigeria Oil and Gas industry Roundtable Conference where he made a presentation, a copy of which was made available to our correspondent on Wednesday.

The PENGASSAN president, who was represented by the Chairman, Trade Union Congress, Rivers State Chapter, Mr. Chika Onuegbu, said, “At the last count, some 150,000 direct and indirect jobs have been lost in the Nigerian oil and gas industry between 2013 and February 2016.

“There is also increasing use of contract staffing, outsourcing and other precarious work forms as employers look for new ways to cut cost. We have also seen increasing conversion of regular jobs to contract jobs under all manner of guises.

“The threat to decent work in the Nigerian oil and gas industry is very serious and this has led to increased industrial unrest in the industry, thereby worsening the already difficult operating environment in the sensitive industry.”

Johnson also decried the state of the nation’s four petroleum refineries, with combined capacity of 445,000 barrels per day, saying they were operating at about 26 per cent capacity utilisation due to many reasons from the obvious political interference in the management of the nation’s refineries to the preposterous lack of crude to refine.

“The result is that Nigeria now exports crude oil and imports refined petroleum products, and in the process started a subsidy programme in 1973, initially as a short-term measure, and supposedly aimed at assisting the citizens pay some part of the full cost of the imported refined petroleum products.

“Consequently, there is no incentive for private investors to build refineries and what we have seen is that the country is littered with investments and infrastructure for the importation of refined petroleum products like tank farms, fuel depots, etc. and a cartel that holds the country at the jugular manipulating the supply of refined petroleum products at the expense of the generality of Nigerians.”

He noted that between 1978 and 1989, the country built and inaugurated three refineries – Warri, Kaduna and Port-Harcourt II with a combined capacity of 385,000 barrels per day.

“One therefore wonders why in the 16 years since the return of democracy in 1999, Nigeria has not attempted to build at least one refinery. Worse still, the existing refineries have been left to rot and functioning at far less than their installed capacities as successive governments are fixated on selling the government-owned refineries.”

In the meantime, workers who have gone on for many months without salaries got yesterday a piece of cheery news.

States’ loans repayment is to be deferred this month to allow them pay workers’ salaries, which have run into many months arrears.

But what the states pay to banks as a result of the Irrevocable Standing Orders (ISOs) will not be affected.

About N10.9billion is the extra cash that the states will take away, depending on their repayment obligation to the Federal Government.

About 27 states are finding it difficult to pay workers.

Minister of Finance Mrs Kemi Adeosun broke the news after yesterday’s meeting of the National Economic Council (NEC) at the Presidential Villa in Abuja. The meeting was chaired by Vice President Yemi Osinbajo.

Mrs Adeosun was accompanied by Nasarawa State Governor Tanko Al Makura and Federal Road Safety Commission (FRSC) chief Boboye Oyeyemi.

According to her, the current economic situation necessitated the deferral of the loans repayment.

She said: “On the update of the financial situation of the states, it was discussed extensively that currently the Federation Account receipts are among the lowest that have been seen in recent memory. We are looking at N299 billion this month and that is because of the very low oil prices recorded in January and February.

“If you remember, oil prices went as low as $28 and $31 and, of course, that has led to a very low Federation Account as a result of which I approached the President and the governors that we defer the loan deductions from the Federation Account entitlement.

“The aim of this is to ensure that we support them through this difficult period to be able to meet salary obligations. The government is very committed to stimulating the economy and recognises the ability of states to meet salary obligations is a very important part of getting the economy moving again.”

“To that end, the President approved that deferral. The states have been asked to submit financial data that would allow us to module and predict how much support in terms of loan deferrals we might need to give just to get through this period until the economy recovers,” Mrs Adeosun added

The Minister said the measure was not a bailout but a deferral of deductions to allow the states have the cash they need to meet their salary obligation.

She also said all the governors endorsed the request to provide financial data and to work on biometric and other initiatives to clean out fraudulent entries on their payroll, such as ghost workers.

On how long the deferrals will last and their possible consequences on the treasury, the minister said: “The approval I have is for the current month but with a proviso. What we discussed is the current situation in the economy requires some actions and what we need to do is to understand the financial profile of states in detail so that we can understand how long we need to support them with loan deferrals.

“On the effect of the deferrals on the economy, I think I will wish to say what is the effect of non-payment of salaries on the economy? That, for us, is really the issue. We have to put money into people’s pocket so that people start spending just to get the economy moving.

“Nobody stimulates the economy by austerity but by spending. So, in some states, as you know, the state government is the highest employer of labour. So, if the state government is unable to pay, nothing happens.

“We have prioritised getting the states back into good financial health.” Mrs. Adeosun said.

The minister said: “Part of that is this commitment to fiscal sustainability and that is why we have asked the states to commit to cleansing their payroll, commit to efficiency, maximising their Internally Generated Revenue (IGR).

“We have asked them to give us their financial data so that we can work together to create a financial module and understand what government needs to do to support the states.

“Of course, we are borrowing, but we have got to make sure that we are borrowing to support the states that are fiscally sensible and prudent in their managing money. So the answer is, we have a month guaranteed but we are asking for information from states to enable us build a module so that we would know if it is three months, six months or however many months to supplement the shortfall to ensure that within reasonable parameters majority of states can pay salaries.”

“And that is taking into account that different states have different obligations and different profiles, but the idea is to support them to be able to pay,” she stated.

Mrs Adeosun presented a report on the balance of the Excess Crude Account to NEC – $2.3 billion.

The second update to NEC, she said, is on the constitution of a search committee for the board of the Nigerian Sovereign Investment Authority.

“And I nominated six people from the geo-political zones. Four men, two women who will search for board members for the Nigerian Sovereign Investment Authority board,” she said.

Al-Makura said one of the critical issues discussed was power.

Due to the priority the administration places on power and the challenges being faced, he said, NEC reconstituted the Board of the Niger Delta Power Holding Company (NDPHC) to facilitate effective power distribution across the country.

He said: “There was a unanimous acceptance of the recommendations and reconstitution of the Board to include one governor from each of the six geopolitical zones. For the Northcentral Zone, we have Plateau to represent: for the North East zone, we have Adamawa governor; Northwest, we have Kebbi State; Southeast, we have Anambra; Southwest we have Lagos and South South, we have Edo.”

The committee has since been inaugurated by the Vice President.

According to him, NEC also discussed bailout matter and Central Bank of Nigeria (CBN) Governor Godwin Emefiele gave an update about those states that have been able to access salary bailout, which is put at about N689.5 billion. An additional N310 billion was disbursed as Excess Crude Account-backed loans to states.

The FRSC Corps Marshal said that the Council approved the Nigerian Road Safety Strategy document of 2014-2018.

The document, he said, will address the current overlaps, and streamline the responsibilities of all participants to maximise the benefits of investments in road safety management.

According to Oyeyemi, NEC also discussed the National Road Safety Council, which the Vice President chairs, with representatives from two political zones and other critical members.

Upshot with additional report from Nation

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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