The Punch

Oil sector generates $5bn freight annually – NNPC

- Okechukwu Nnodim, Abuja

ABOUT $5bn worth of freight is moved annually by maritime vessels operating in Nigeria’s oil and gas sector, the Nigerian National Petroleum Corporatio­n has said.

Freight basically means goods transporte­d in bulk by truck, train, ship, or aircraft.

Speaking on the theme, ‘enhancing effective synergy between oil, gas and maritime sectors for greater value creation’, at the 4th Annual Lecture and Awards 2021 organised in Abuja by Value Chain Magazine, NNPC’S Group Managing Director, Mele Kyari, described opportunit­ies in the maritime space as huge.

In his presentati­on at the event, which was made available to our correspond­ent on Wednesday, the NNPC boss outlined the opportunit­ies to include maintenanc­e, mining, support services, insurance, among others.

Kyari, who was represente­d by Chief Operating Officer, Gas and Power, NNPC, Yusuf Usman, said, “Available statistics show that there are over 20,000 ships working for the oil and gas industry in Nigeria’s waters with an annual expenditur­e of over $600m in the upstream sector.

“The oil sector spent $3bn on marine vessels between 2014 and 2018, of which 73 per cent was spent on crude boat, security and power supply interventi­on.

“This reflects the huge potential in the sector as we aspire to grow our production to three million barrels per day. Without doubt, the potential of the Nigeria blue economy is huge and remains largely untapped for the benefit of the country.”

Kyari stated that the maritime sector had the potential of contributi­ng at least 10 per cent of the country’s GDP in no distant future, as Nigeria had the biggest market in Africa, generating about 65 per cent of cargo through West Africa.

The NNPC boss said, “The maritime industry in Nigeria shares common business interest with the oil and gas sector as shipping has always been of strategic importance to the industry right from when Nigeria started exporting crude oil some five decades ago.

“We’ve recorded more oil production carried out offshore and over 70 per cent of total oil production transporte­d by ships, as this industry generates $5bn freight post annually and has potential to have it at $8bn.”

He, however, stated that despite having this resource, Nigeria was yet to gain the full benefit of this economy, adding that the challenges confrontin­g the maritime, oil and gas sectors manifest in different forms.

This, he said, was by virtue of the capital intensive nature of the sector, huge risk, as foreign vessels’ owners had a competitiv­e edge over indigenous players.

“There is a need to look inward and bring capacity locally to strengthen the synergy between maritime and oil and gas sectors,” Kyari stated.

He explained that with the emergence of COVID-19 and its impact globally, the oil and gas and maritime sectors should not be seen operating in isolation from one another.

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