As FG legalises bunkering
Thirty years after it was put on hold due to some abuse, the Jonathan administration last week lifted ban on bunkering activities in the nation’s coastal waters.The government said licenses to prospective operators of bunkering would begin by the end of this month as a show of its commitment to make huge success of its move to legalise bunkering in the country.
Bunkering is the downstream business in the maritime sector, including fueling of ships of all kinds in the high seas, inland water ways and within the ports. Sadly, bunkering in Nigeria has been abused and reduced to the unwholesome activities of people who tamper with pipelines and make commercial fortunes of the nation’s oil wealth to themselves. The number of those involved in the act has disturbingly increased in recent times Stakeholders in the nation’s oil and gas said the latest move by the Federal government may signal end in sight to illegal bunkering and large scale oil theft which has punctuated the nation’s oil revenue in the country.
Nigeria is said to be losing over $6billion oil revenue annually to thieves who bunker the nation’s crude and oil products with reckless abandon President Jonathan said the resuscitation of bunkering in the country would be another platform to engineer his economic agenda in the oil, gas and marine sectors in the country.
According to the Department of Petroleum Resources (DPR), before 1979 not much record of bunkering activities was recorded in the country.
In 1979,bunkering was introduced as a legitimate business activity with licenses issued by the Department of Petroleum
Resources (DPR). Five years later bunkering operations were limited to five major oil marketing companies by the regime of General Muhammadu Buhari, due to the abuse of the system.
In year 2000,bunkering activities were again suspended by the Federal government due to the subsidy on petroleum products which more or less gave the operators huge profits that didn’t trickle down to government.
At a sensitization forum organized by the Department of Petroleum in Lagos, its Director, Engineer George Osahon told participants that the resuscitation of bunkering operation by President Goodluck Jonathan was done in the interest of the country.
He explained that the resumption of bunkering operations in Nigeria would generate revenue for the government and create employment opportunities for the growth of the economy.
Besides, Osahon said the potential beneficiaries of the resuscitation of bunkering activities are; Fishing trawlers, LNG tankers, Very Large Crude Carriers, Ultra Large Crude Carriers, Coastal tankers, Bulk cement and Cargo carriers.
Others are; Bulk wheat cargo carriers, General cargo carriers, Container carriers, Supply vessels, Tug boats and marine support vessels as well as other offshore oil facilities
He stated that performing the operations in Nigeria would also save oil, gas and marine operators the current stress of going to Senegal, Cape Verde and Cote D’ Ivoire to fuel vessels that operate in the Nigerian territorial waters.
Osahon said the agency would roll out the guidelines for the regulation of the activities in accordance with the provision of the Petroleum Act 1969.
Among petroleum products recognized by the Act for bunkering activities are; Automative Gas Oil (.AGO), Low Pour Oil and recently Liquefied Natural Gas (LNG).
He said his agency recognize two types of bunkering operation, adding that licenses will be issued based on the nature of operation which require different qualifying criteria.
He said bunkering companies are to source their products, which is specified by International Maritime Organisation independently.
The companies are responsible for the quality of such fuels and are enjoined to maintain reasonable bunker stock as only product availability guarantees hub patronage by vessel owners, he said
According to him, prospective operators would be required to submit an application to the Nigerian Navy detailing the vessel to be used, the location of the bunkering operation or discharge point, the quantity of fuel and the duration of the operation, in order to secure the bunkering permit.
He said the regulatory body hopes to generate about N250 million annually from licensing renewals and registration of vessels for bunkering activities.
Director in charge of the Directorate of Marine Services, Nigerian Navy, Navy Captain SO Ayeni, who also spoke at the forum gave guidelines for prospective operators of bunkering in the country.
He said the operator must present to the Nigerian Navy Headquarters an application for bunkering clearance, stating: the vessel involved; location of bunkering operation or discharge point; quantity of bunker fuel and duration of the operation,” he said.
He said the operator must disclose the source of his bunker fuel, adding that the product must not come from Nigeria, unless it is stolen oil product. Ayeni also said the operator must get licence and certifications from the DPR and the Nigerian Maritime Administration and Safety Agency (NIMASA) on the quality of the products and the vessels.
According to him,all these will be verified at the Directorate of Marine Services in Lagos for validity; adding that if they are in order, recommendation is made to the Naval Headquarters for prompt approval of a particular bunkering operation as contained in the application.
Deputy Comptroller of Nigerian Customs in charge of Operations, Eastern Marine Command, Port Harcourt, Mr. Edorhe Elton, said the operator must show proof that the duty is fully paid, especially for home-use vessels He said vessels leased from abroad must obtain temporary-importation permit from the Customs.
He also said that the bunkering vessels of operator must not leave the Nigerian territorial waters, whether they are home-used or leased vessels.
Owners of vessels must obtain approval from the nearest Area of Customs before they move the facilities from
one part of the nation’s territorial waters to another.
Edorie said for the vessels of the operators to be licensed, they must be regulated by Customs TransAir ,while the tank farms of the operators must be located within the spot.
Also speaking at the forum, Assistant Director, Safety of NIMASA, Ubong Abasi, said for operators of bunkering to pass
his agency’s test they must let NIMASA know if they want to construct their vessels.
He said operators must adequately convince his agency that they are the owners of the vessels by supplying documents authenticating the origin of the ship.
Stakeholders, who spoke with our correspondent said the latest drive by the government will actually go a long way in bringing sanity to the oil and gas sector which has been enmeshed in crude oil theft crisis.
Chief Executive Officer (CEO) of Shoreline Energy International, Mr. Kola Karim, said the move by the Federal government is a square peg in a square hole to tackle crude oil theft and restore investors confidence in bunkering business in Nigeria.
Karim,who said bunkering is not an illegal business in the real sense of it, explained that the current effort of the government would force illegal operators of the business to seek legitimate means to legalize their activities on the nation’s coastal waters.
Lagos businessman, Ayo Akinbade said the resuscitation of bunkering in the country would open up the marine sector by creating job opportunities for more Nigerians.
Speaking with our correspondent, General Secretary of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Bayo Olowoshile, said bunkering is
a global trade carried out in virtually all the countries of the world through the seaports.
He said some unscrupulous Nigerians however chose to carry out the business through an illegitimate means in a manner that has continued to bleed the country.
Olowoshile said the move to legitimize the business would mark a new beginning in the nation’s quest to bring about
accountability in the nation’s oil production as well as confidence of investors.
He however said the success of government’s efforts would determined largely by its readiness to introduce data detection device and how well it can effectively trained personnel who will monitor compliance with the new way of doing bunkering business in Nigeria.