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NNPC records N255.28bn losses in 11 months

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…Brightoil In for Ten Bunker Tankers

The total loss of the Nigerian National Petroleum Corporation (NNPC) from January to November 2015 has been put at N255.28bn, as against N240.98bn which it recorded from January to October in the same year.

An analysis of the corporation’s financial report for October and November 2015 showed a difference of N14.3bn between the two months.

The oil firm’s latest financial report also showed that the NNPC had made dollar payments totalling $607.8m to the Federal Accounts and Allocation Committee from January to November 2015. On the naira payments to the Federal Government, the corporation said, “The sum of N933.1bn for domestic crude oil and gas and other receipts was paid to the Federation Account from January to November 2015.”

The report further stated that the country’s refineries operated at zero capacity utilisation in the month of November.

 It also stated, “The group operating revenues after subsidy for the months of October and November 2015 were N173.56bn and N155.10bn, respectively. This represents 56.72 per cent and 50.68 per cent, respectively of monthly budget.

Similarly, operating expenditures for the same periods were N185.78bn and N169.39bn, respectively, which also represented 69.55 per cent and 63.42 per cent, respectively of budget for the months.

“Operating deficits of N12.22bn and N14.29bn for October and November 2015, respectively were attained as against monthly budgeted surplus of N38.91bn. (The) 59.63 per cent of YTD (year-to-date) NNPC deficit of N255.278bn is mainly accounted for by claimable pipeline repairs/management cost of N95.37bn and crude and product losses of N56.68bn due to vandalised pipelines.”

On the performance of refineries, the report stated that the total crude processed by the three facilities for the month of November 2015 was zero. The refineries are Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company.

The NNPC said the total export proceeds of $402.55m were recorded in November, 2015 with proceeds from crude oil export sales amounting to $296.99m or 73.78 per cent of the dollar payment compared with 72.97 per cent contribution in previous month (October, 2015). It stated that gas export sales and Nigeria Liquified and Natural Gas feedstock amounted to $105.53m, which was 26.22 per cent contribution compared with 18.97 per cent contribution in the prior month of October 2015.

“The remaining $0.03m was attributable to other dollar denominated receipts by the corporation and a total of $607.8m has been paid so far to FAAC in the year 2015 from sales of export oil and gas,” it said.

The national oil firm explained that the downward trend in global oil prices had continued to affect the energy industry worldwide with average crude price of $44.29 per barrel on dated Brent benchmark throughout November, 2015. Meanwhile, only two of the nation’s refineries in Kaduna and Port Harcourt met the 90-day fast-track ultimatum, which elapsed on Thursday, December 31, 2015. The Minister of State for Petroleum Resources and Group Managing Director of the NNPC, Dr. Ibe Kachikwu, had recently given the 90-day ultimatum for the revival of the refineries.

Three of the nation’s four refineries in Warri, Kaduna and Port Harcourt had resumed production of refined petroleum products in July after undergoing rehabilitation, but they were shut down in August, September and October, respectively. The Kaduna refinery and one of the two plants in Port Harcourt have, however, come back on stream. The Kaduna refinery, which has a capacity of 110,000 barrels per day, had two weeks ago resumed production, almost four months after it was shut down as a result of lack of crude supply caused by the repair of the pipeline pumping crude to the plant.

The 150,000bpd refinery in Port Harcourt was said to have started production on Sunday, while the 60,000 bpd refinery, the nation’s oldest refinery, remained shut down as of December 31. The 125,000 bpd Warri refinery, which is a complex refinery with an associated, but now moribund, petrochemical plant designed to produce polypropylene and carbon black, has yet to come back on stream. The Managing Director, Port Harcourt Refinery Company Limited, Mr. Bafred Enjugu, told our correspondent on Thursday that “we have resumed production since the morning of December 27, 2015.”

But no further details were given. Another source at the Port Harcourt refinery, who confirmed to our correspondent that the plant resumed operation on Sunday, said, “We are streaming area by area. We started with Area 1. We started going to storage of refined products since Sunday. But the old one is not yet up.”

The PHRC MD had last week told our correspondent that the refinery operated until October 13 when they had a blip with their main column, adding that it had been fixed all locally and they were in pre-commissioning mode with start up to follow. The nation’s refineries in Warri, Kaduna and Port Harcourt have a combined installed capacity of 445,000 barrels per day.

Kachikwu had recently said in the next 24 months, Nigerians would see a positive dramatic turn in the refinery model in the country.

The NNPC had in August cancelled the contract for the delivery of crude oil to the nation’s refineries in Warri, Port Harcourt and Kaduna, due to exorbitant cost and inappropriate process of engagement.

In the meantime, Hong Kong-listed Brightoil Shipping has decided to purchase ten bunker tankers from Shenzhen Brightoil Shipping for a total cash consideration of USD 84 million.

The vessels will be built by Rizhao Kingda or such other qualified shipyards mutually agreed by the relevant parties, Brightoil said.

The vessels are scheduled for delivery by the end of 2016.

” The group considers that the purchase of the vessels will enhance the competitive edges in the bunkering business of the group by expanding the operating fleet, lock the current low price of the bunker barges in order to save costs; and bring in additional revenue to the group through additional marine bunker sales volumes,” Brightoil said commenting on the move.

Shenzhen Brightoil Shipping is controlled by Dr. Sit, who is an Executive Director, the Chairman and the Chief Executive Officer of Brightoil and a controlling shareholder indirectly interested in approximately 72.98% of the issued share capital of the company.

 

Agency report with additional report from World Maritime News

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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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