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Saudi rallies oil price to $35.77 a barrel

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  • 166.91m litres of fuel stuck in depots as marketers blame NNPC for scarcity

Brent crude rose two per cent yesterday adding to strong gains last week as the Organisation of Petroleum Exporting Countries (OPEC) kingpin, Saudi Arabia said it would work with other producers to limit oil market volatility.

Brent futures LCOc1 were trading at 35.77 dollars a barrel at 1443 GMT, up 67 cents from their previous close.

U.S. crude futures CLc1 were up 42 cents at 33.20 dollars.

“The kingdom (of Saudi Arabia) seeks to achieve stability in the oil markets.

“‘It will always remain in contact with all main producers in an attempt to limit volatility and it welcomes any cooperative action,” the Saudi cabinet said in a statement.

Saudi Arabia and several fellow OPEC members agreed with non-OPEC Russia this month to freeze output at January levels in an attempt to prop up prices.

Russian President Vladimir Putin has called a meeting with top managers of his country’s leading oil producers for today.

However, Iran remains the main obstacle to a global output freeze because it is determined to ramp up supply after the country’s emergence from international economic sanctions in January.

Yesterday, Iran said it had increased exports steeply over the past month. Exports climbed as high as 1.75 million barrels per day, adding to an already oversupplied market.

“There is still a lot of downside risk … but the U.S. crude market seems to have passed the worst point.

“Crude runs should start creeping higher, taking pressure off inventory levels,” said Richard Gorry, director of JBC Energy Asia.

U.S. producers cut the number of rigs drilling for oil for a tenth week running, taking the rig count to its lowest since December 2009.

A media monthly poll showed yesterday that oil prices are expected to average a little more than $40 a barrel this year.

Financial data also suggested sentiment might be shifting.

Data from InterContinental Exchange yesterday showed that investors in crude held more futures and options contracts betting on rising prices than at any time since the records began in 2011.

The amount of open positions in U.S. crude contracts betting on a further fall in prices has dropped to about 17 per cent since mid-February.

At the same time, financial traders have raised their bullish bets on oil after talk of a global production freeze, signs of falling U.S. shale crude output and growing gasoline demand.

“There are tentative signs the worst may be over for commodities, at least judging by the pick-up in investor sentiment,” Barclays (L:BARC) said.

Meanwhile, about 166.91 million litres of premium motor spirit, PMS, also known as petrol, are stuck in various depots in Lagos, a situation that gave rise to the resurgence of long queues at filling stations in Lagos metropolis and other parts of the country.

The Nigerian National Petroleum Corporation, NNPC, and its downstream subsidiary, Pipelines and Products Marketing Company, PPMC, are being blamed for the current petrol shortages because of a loading directive not exceeding 50 trucks daily given to the depots.

The blame comes as NNPC said it has stepped up collaboration with the Major Oil Marketers Association of Nigeria, MOMAN, and other downstream industry players to end the resurgence of fuel queues in some major cities across the country, especially in Lagos and environs.

It is uncertain how much fruit this effort will yield as Vanguard investigations revealed that of an opening stock level of 140.48 million litres of petrol available in 31 depots in the Lagos area yesterday, only 6.09 million litres were loaded out.

This leaves an outstanding of about 135 million litres stuck in the depots, which had increased to about 166.91 million litres closing stock at press time.

Broken further, of the 59 depots operated by majors, independents and private owners in Lagos, 31 had the available stock quantity, but only 16 depots had “liftable” PMS, that is, had enough stock above the jet stock level or above minimum requirement levels.

Further investigations revealed that most of the depots being used by NNPC/PPMC for throughput or storage purposes were directed not to load above 50 trucks daily, thus compounding the shortages situation, a development that some depots operators cashed in to sell at N105/litre ex-depot, against government’s prescribed N77 per litre.

According to one of the depot operators, who preferred anonymity: “No matter the quantity of product NNPC gives us, since they have said not more than 50 trucks per day, we cannot go beyond that. “Our depot is now like a ghost yard, because we’ve finished with the 50, but we still have stock, and there is a long queue of trucks waiting to load outside.”

But NNPC, in a statement, yesterday, said it had “secured the commitment of the leadership of MOMAN for effective collaboration in this regard and assured that the queues will disappear in the days ahead as supplies are ramped up across the country.”

The statement signed by the corporation’s spokesman, Mr. Ohi Alegbe, also said: “The corporation noted that to achieve this, truck-out to filling stations in the Lagos area has been increased from the regular 245 to 295 trucks per day (9.7 million) while truck-out to fuel stations in Abuja from Suleja depot has been stepped up to 210 trucks per day (6.9 million litres) from the regular supply of 160 trucks per day.”

It added that “similar increment in supply volume has been activated in Port Harcourt, Calabar, Kano and Kaduna areas to ensure seamless availability of petroleum products across every nook and cranny of the country.”

While appealing for understanding and support from members of the public, the NNPC assured that it was doing everything possible to end challenges experienced by motorists, commuters and the general public in accessing petrol.

“Within the last 48 hours we have received six cargoes of petrol (270 million litres) and beginning from March 1, 2016, we shall begin to receive one cargo of petrol every day (45 million litres),” the corporation said.

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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