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NNPC, Shell, Total, Mobil, others fleeced Nigeria of $4.4bn — NEITI

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  • $577m foreign airlines fund hangs in Nigeria –IATA

The Nigerian Extractive Industries Transparency Initiative (NEITI), yesterday, accused the Nigerian National Petroleum Corporation, NNPC, and other oil and gas companies of shortchanging the country and failing to remit $4.4 billion and N358.3 billion to the Federation Account in 2013.

This comes as Lagos-based indigenous chartered accounting firm, SIAO Partners, had been contracted by NEITI to carry out the 2014 audit, even as it is in the process of procuring auditors for its 2015 audit.

Minister of Solid Minerals and Chairman of NEITI Board, Dr. Kayode Fayemi, who disclosed this in Abuja, during the release of the 2013 Oil & Gas and Solid Minerals’ Audit Reports, also revealed that Nigeria lost $5.966 billion and N20.4 billion in 2013 to crude oil theft, Offshore Processing Agreement, OPA, and Crude Oil for Product Swap Arrangement.

The NEITI report further stated that the country earned $58.07 billion from oil and gas sector, dropping eight per cent from $62.9 billion realised in 2012, adding that the sum was earned from crude oil sales, taxes, royalties and other incomes.

Explaining the decline in oil and gas earnings in the year under review, NEITI attributed this to a drop in oil and gas sales, following divestment of federation equity in some oil assets and crude oil losses. In addition, the report noted that N33.86 billion accrued to the federation from the solid minerals sector in 2013.

Broken down further, cement manufacturing companies accounted for N30.47 billion or 89.98 per cent of the total; construction companies, N1.98 billion or 5.83 per cent and; mining & quarrying companies, N1.42 billion or 4.19 per cent respectively. Giving a breakdown of the figures in the oil and gas report, Fayemi said NNPC and its sub-units failed to remit $3.8 billion and N358.3 billion in 2013, while $599.98 million was under-assessments/underpayments of petroleum profit taxes and royalties by oil and gas companies.

In the case of the NNPC and its sub-units, the report stated that outstanding payments were due from unpaid considerations from divested Oil Mining Leases, OMLs, cash call refunds from the National Petroleum Investment Management Services, NAPIMS; and Nigerian Petroleum Development Company, NPDC, liftings from Nigerian Agip Oil Company, NAOC, Joint Venture, JV, among others.

In the meantime, it has been revealed that the controversial trapped funds of foreign airlines with the Central Bank of Nigeria, CBN, have risen to $577 million as at March, 2016. This is as 22 countries out of 54 in the continent have signed the Solemn Declaration, which would enable intra-connectivity within the continent among its carriers. The Regional Manager, South West Africa, International Air Transport Association, IATA, Mr. Samson Fatokun, disclosed this yesterday in Abuja during a press briefing at the ongoing two-day Aviation Day organised by the association.

The foreign airlines have been unable to repatriate the funds earned from the ticket sales in the country since October, 2015 and this had caused lots of crisis in the airline sub-sector as some of them had threatened to suspend operations into the country while others are thinking of downsizing their employees in the country.

However, a source close to one of the foreign carriers confided in our correspondent that most hit by the Federal Government policy are Emirates, British Airways, Delta Air Lines, Air France- KLM and Kenya Airways. Also, the source said the blocked fund was initially over $700 million, but that the Federal Government had in the past two months released some of the money to the affected airlines. Besides, Fatokun explained that IATA together with foreign airlines were engaging the Federal Government to ensure the release of the funds, stressing that about a month ago, it held a meeting with the Vice President, Professor Yemi Osibajo, and other government officials where they were assured that the funds would be released to them soon.

Fatokun further informed that the $577 million trapped in Nigeria was the highest in the continent, but emphasized that Venezuela had the highest number of blocked funds in the world at $3.5 billion. He said: “The funds we are talking about does not belong to foreign airlines alone as it equally affects Nigerian carriers. As at today, Nigerian carriers are not able to assess dollars for procurement of spare parts and maintenance of their aircraft abroad among others.

“However, Nigeria remains the highest in the continent with blocked funds. But, the government has assured us that the controversy surrounding the funds would be resolved very soon and we are believing them for that.”

Also speaking at the occasion, the Secretary-General of the African Civil Commission, AFCAC, Miss Iyabo Sosina, disclosed that 22 countries out of 54 in the continent had signed the solemn declaration, which would promote intra-connectivity within the continent. The Solemn Declaration is propelled by African Civil Aviation. Sosina said that African Union, AU, had set a deadline of December 2017 for the commencement of the policy in the continent.

She explained that when the policy becomes operational, airlines from the continent would make more revenues while more passengers would be attracted to the continent for flight operations. She insisted that AFCAC would continue to promote single airspace for the continent in order to boost productivity and revenues. Besides, the Vice President, Africa for IATA, Mr. Raphael Kuuchi, said that opening up of the African continent for its carriers had significant benefits for the airlines, but noted that there are resistances from some carriers in Africa. “There are some resistances from some carriers, but the issue is that they are not policy makers. Governments are those to implement the policy. If the states are committed to opening up of the airspace, the airlines would not be able to kick against it.”

Vanguard with additional report from National Mirror

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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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