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OPEC members keen to end oil glut – Kachikwu

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  •  As Senate is keen, to pass budget before March ending

The mood inside the Organization of the Petroleum Exporting Countries (OPEC) is shifting from mistrust to a growing consensus that a decision must be reached on how to end the global oil price rout, Minister of State for Petroleum Resources Ibe Kachikwu has said.

Oil prices have slumped by more than 70 per cent to near $30 a barrel over the past 18 months as OPEC, led by top producer Saudi Arabia, sought to drive higher-cost producers out of the market by refusing to cut production despite a supply glut.

The price crash has crippled some economies that depend heavily on oil sales for income, such as Nigeria and Venezuela, and even Saudi Arabia is shoring up its resources to withstand the painful revenue drop.

“There’s increased conversation going on. I think when we met in December … they (OPEC members) were hardly talking to one another. Everyone was protecting their own positional logic,” Nigerian oil minister Emmanuel Ibe Kachiwku told Reuters in an interview.

“Now I think you have cross-logic … they are looking at what are the deficiencies, what is the optimum.”

Struggling oil producers have made repeated calls for an emergency OPEC meeting, but Kachikwu said that the timing had not been right. The cartel’s next regular meeting is in June.

“We haven’t been sure that if we held those (emergency) meetings that we could actually walk away with some consensus,” Kachikwu said.

“A lot of barrels are tumbling out of the market from non-OPEC members, so the Saudi philosophy is obviously working. But it’s not influencing the price higher, which means that whether we like it or not some barrels are coming in from … members and non-members to cover whatever is dropping out.”

The International Energy Agency said on Jan. 19 that oil markets could be oversupplied by as much as 1.5 million barrels per day in the first half of 2016 and warned that prices could decline further as Iran’s emergence from economic sanctions brings more crude to the market. OPEC has declined to trim output without help from non-members, which so far have refused to participate.

Russia, the world’s biggest oil producer, has played coy by floating the idea of a cut without saying whether it would participate.

In an attempt to find a compromise, Venezuela’s oil minister recently proposed a freeze on new production to place a cap on the growing glut while not requiring countries to surrender market share. Kachikwu said that he would meet his Qatari and Saudi counterparts next week to discuss the situation.

“Have we got to the point where we can say there is a definite strategy? In terms of production reduction or freezing, no, I don’t think we have got there. But there is a lot of energy (behind the idea),” Kachikwu said.

“As you get closer to the statutory (OPEC) meeting dates … you are going to see a lot more people get active in those conversations and try to find solutions.”

In the meantime, Senate Leader, Ali Ndume, yesterday, said the Senate would strive to pass the 2016 budget before the end of March.

This came on a day the House of Representatives Committee on Media and Public Affairs, Abdulrazak Namdas, said submission of the 2016 budget on February 25 might still be realisable.

The Senate Leader said March was the deadline for the implementation of the 2015 budget, adding that it was the desire of the Senate to pass the 2016 budget before that time He said contrary to reports, the Senate did not suspend its passage indefinitely, but only said that the February 25 deadline ‘may not be feasible’.

He said it was the wish of the National Assembly to pass the budget five weeks before the expiration of the period set for the implementation of the 2015 budget, but that was not possible due to some errors.

He said: “We have not postponed it indefinitely; we are saying that with the current developments, the February 25 deadline we gave ourselves may not be realistic.

“That is why we now said it is not possible to say we will come back on 25th and say this is the budget; we are not saying that we have suspended it indefinitely.

“The reason we fixed 25th was because we wanted to have a gap of five weeks.”

He said the gap would have enabled the Senate fix whatever issues needed to be handled before the lapsing of the March 31 deadline for the implementation of the 2015 budget.

Ndume said the National Assembly leadership had met with ministers to iron out the grey areas and make corrections. He also assured that the Senate would ensure strict compliance with the implementation of the budget. He said that once funds were available, he was convinced that the present administration would ensure thorough implementation of the budget.

However, Chairman of the House of Representatives Committee on Media and Public Affairs, Abdulrazak Namdas, has said submission of the 2016 budget on  February 25 might still be realizable. Namdas hinged his position on the fact that in the last two weeks, the House had done an extensive work on the budget as most stakeholders had defended their budget proposals.

He, however, refuted a report by a media outfit, Media Support Centre, which alleged fraudulent activities by members of the National Assembly in the handling of constituency projects between 2013 and 2015.

At an interaction with journalists in Abuja at the weekend, Namdas said the National Assembly would be worried if a media outfit will be calling for the scrapping of constituency projects, adding that in most cases constituency, projects were the saving grace.

“It is obvious that the media support centre do not know how constituency projects are managed. “Law makers are never given a penny to carry out constituency projects. Constituency projects are appropriated to the relevant MDAs.

No cash is given to a law maker. “Therefore, to say law makers diverted monies meant for constituency projects demonstrate not only lack of understanding of constituency projects, but also a desperate attempt by few individuals to set law makers against their constituents, “he said.

The Chairman assured that the 8th House of Representatives will do things differently including ensuring that constituency projects get to the people adding that the present crop of law makers have zero tolerance for corruption.

Namdas further begged for the understanding of Nigerians on the 2016 budget adding the House is working very hard in collaboration with the Executive to ensure that the budget is passed speedily.

The Nation with additional report from Vanguard

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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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