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Operators oppose move to amend Oil and Gas Export Free Zones Act

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Private terminal operators last week sent a petition to the Senate Committee on Trade and Investment in protest of a public hearing on an Act to amend the Oil & Gas Export Free Zone Authority Act Cap 05 Laws of the Federation of Nigeria 2011 to provide for the designation and establishment of oil and gas free zones and special investment areas In Nigeria and for related matters.

Secretary, Seaport Terminal Operators Association of Nigeria (STOAN), Barr. Uzamot Boye, who signed the letter dated September 23, 2014 and which was sighted by SHIPS & PORT DAILY; said the protest was first based on the fact that as stakeholders in the trade chain in Nigeria, the terminal operators were not informed nor invited to the public hearing which touched “on the essence of the concession programme of the Government of Nigeria”.

The letter stated: “A critical look at the proposed amendment, in particular the amendment of section 12, shows a clear violation of the existing extant laws and agreements on which the present port concessions are based.

“It is important to note that all the Terminals that were concessioned has its own separate and distinct subsisting agreements.

“In the circumstances therefore, we see these proposed amendments as illegal, biased and an attempt to serve a particular interest against the wish and will of Nigerians and against the spirit and letters of the 1999 constitution of the Federal Republic of Nigeria as amended which the Senators as lawmakers swore to uphold.”

The STOAN scribe stated in the letter that the amendment to the oil & gas export free zone Act CAP 05 LFN is premised on the consideration of the substantial investments made in Onne oil and gas free zone concession to Intels Nig. Ltd.

He said the proposed amendment also assumes “that only Intels Nig. Ltd has concessions in Onne, Warri and Calabar Ports among all concessionaires in the Eastern Port with General Cargo Terminals.

“That investors are free to choose Ports of discharge of their cargoes within the designated Terminals at Onne, Warri and Calabar Ports clearly violates the concession agreements of Terminal operators with general cargo terminals in the Eastern Port.

“That if the bill is passed into law, Intels Nig. Ltd with terminals in Onne, Warri and Calabar Ports will become a monopoly in handling oil & gas related cargoes in Nigeria contrary to the aims and objectives of the Federal government Ports Reforms, Modernization and concessions through Privatization and Commercialization programme. “He stated that if the proposed amendment bill is passed into law and all oil and gas related cargoes are diverted to Onne oil & gas free zones, it will open a flood gate of litigations because of breach of the lease agreements with general cargo terminals.

He said: “That the concessions were done under the NPA and Public Enterprises (Privatization & Commercialization) 1999 Act and not the oil & gas export free zone Act CAP 05 LFN 2011 with specific GMT – Guaranteed Minimum Tonnage targets base on the expected general cargoes inflow including oil & gas related.

“That the proposed amendment is a duplication of the roles of oil & gas free zones and Nigerian Ports Authority (NPA).

“That the Seaport Terminal Operators Association of Nigeria (STOAN) have taken a    position that there is nothing like oil and gas related designated Port which has been communicated to the Presidency, the BPE, the National Assembly through its Committees on Privatization & Marine, the NPA and the Federal Ministry of Transport,” he stated.

He said only recently, the Senate Committee on Privatization wrote a letter to the terminal operators to align with their position that consignees/investors should be free to choose their port of discharge.

The STOAN members therefore requested the Senate to back pedal on the amendments “as it will lead to an array of litigations which the Committee cannot contain.”

Solicitor to STOAN, Mr. Mike Igbokwe (SAN), while speaking in the same vein, said “In STOAN’s view, this proposed amendment is fraught with a lot of ambiguities that would lead to avoidable controversies and litigations and run contrary to international trade, maritime law and international law principles and if not reviewed and changed as will be suggested below, would become counter-productive and destroy the good intentions of the distinguished Senators when being implemented.

“The implications of stipulating that all Oil and Gas related cargoes must be handled only at approved Oil and Gas concessioned ports with freedom to investors in the Oil Gas Free Zone and Special Investment Areas to choose ports of discharge of their cargoes within the designated terminals at anne, Warri and Calabar port include that:

“(i) Calabar port which is an Eastern Zone port that is not one of the ports designated as an Oil and Gas Free Zone in either the OGEFZA or the proposed Act, is mentioned as one of the ports that the investors are free to choose as ports of discharge of all oil and gas related cargoes whereas the Eastern port of Port Harcourt and other ports are conspicuously omitted.

“(ii) Other terminals including Port Harcourt and Western zone ports not designated as oil and gas terminals can no longer handle and are totally shut out from handling all oil and gas related cargo even though they are ports concessioned by the FGN/BPE/NPA to investors and have massively invested in cargo (including oil and gas) handling equipment to handle such cargoes while these cargoes would now be diverted to only Onne, Warri and Calabar ports.

“(iii) In the recent past, one of our client’s members (Ports and Terminal Operators of Nigeria Limited (PTOL) that is the concessionaire of Terminal A, Port Harcourt port had to send a petition to the House Committee on Marine Transport dated 22nd April, 2013 that vessels carrying cargo wrongly termed ‘oil and gas cargo’ meant for its terminal were being diverted to Intels Nigeria Limited (“Intels”) at Onne and other Terminals by NPA on the wrong basis of a Resolution passed by the House of Representatives, the House Committee on Marine Transport had a Public Hearing of the Stakeholders on the matter on 30th April, 2013. At the Public Hearing, Intels, NPA and PTOL made presentations at the end of which the House Committee resolved inter alia that the Committee stood by the House Resolution of 2012 “That Operators should be free to choose ports of discharge of their cargoes within the designated ports of Onne, Calabar, Port Harcourt and Warri.”—Ships and Ports

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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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