By Yemie Adeoye & Godwin Oritse
IN an effort to bring about a strict implementation of the Cabotage and the Nigerian content laws, the newly constituted Nigerian Content Development and Monitoring Board (NCDMB) in conjunction with the Nigerian Maritime Safety and Administration Agency (NIMASA) have decided to work together in instilling the laws on all stakeholders and operators in both sectors.

The two federal Agencies also lamented the low level participation of genuine Nigerian companies in the maritime sector which has resulted in the flight of over 90 percent of expenditure in the Maritime segment of the Oil and Gas industry to foreign economies where ownership of the various assets used in the Nigerian Oil and Gas Industry is domiciled.

Speaking at a joint press briefing held at NIMASA’s corporate Head office in Lagos, the duo of NIMASA’s Director-General Mr. Temisan Omatseye and the Executive Secretary NCDMB, Engr. Earnest Nwapa told newsmen that it is highly imperative for these laws to be implemented to the letter so that foreign investors and international operators in both sectors would know that government is serious with the Nigerian content law.

The NIMASA DG further stated that the development would domicile in-country billions of naira which hitherto had always found its way to foreign business interest. Mr Omatseye who specifically lamented the non involvement of Nigerian owned vessels in the lightering business of the Nigerian National Petroleum Corporation, NNPC, stated specifically that with a quarterly importation of about 4 billion liters of petrol into the country, there is a sizeable measure of business activities that could benefit indigenous ship owners.

“Even if there are complains about the Nigerian owned vessels not being up to standard, what should come first is the availability of jobs which would help indigenous ship owners to put their vessels in order”

Speaking in a similar vein Engr. Earnest Nwapa stated that over 5 percent of oil and gas industry spend is channeled to the maritime industry in the cost of exploration, production, storage, transportation, processing and trading in oil and gas.“ We must ask ourselves the  following questions;  Why has the Jones Act been used successfully in the USA to develop and empower American Marine business and technology while the Nigerian Cabotage Act remains largely underplayed after 7 years?

Why has the local Content Policy been used successfully in Brazil and Malaysia while the Nigerian Content Policy is still to meet targets.

There maybe several answers to these questions, but the incontrovertible fact is that in the successful countries, a common thread that runs through these jurisdictions is a deliberate insistence on implementation of the provisions of the laws and Policies of Government.

IMPLEMENTATION!!! That is what is missing and what NIMASA and NCDMB must continue to collaborate to ENFORCE COMPLIANCE as two (2) Government agencies charged with the responsibility of building capacity and regulating local capacity utilization in two critical interlinked segments of the Nigerian economy.

The collaboration between these agencies did not start today. Indeed we are all witnesses to the benefits of bringing the maritime and Oil and Gas sectors together when NCD and NIMASA started engagements to bring the operations of the oil majors into focus in the realization that much could not be achieved in both sectors without such collaboration.
The significance of the Maritime and Oil & Gas industry to the Nigerian economy can not be over-emphasized.

In a paper presented in the recent Maritime roundtable (MAROUT 002), Dr Amaka Chizea of the National Chambers of Shipping stated that “the maritime sector provides for almost 90% of transport requirement of the world.

In West Africa, seaborne trade accounts for over 60% of the total Gross Domestic Product (GDP) of the 16 countries that make up the Economic Community for West African States”

She further noted that “Nigeria generates more than $5 million daily on crude oil freight at an average freight rate of $2.5 per barrel; however less than 2% of this revenue is retained within the country. Analysis made on tonnage a few years ago shows that among the 13 member countries of the Organization of Petroleum Exporting Countries (OPEC), which have a total of 134 tankers; Nigeria has only two tankers, which are merely used for storage rather than lifting crude oil”.

Despite provisions in lifting contracts and agreements, Nigeria lifts less than 500 DWT per day out of the total of 24 million DWT aggregate OPEC tanker capacity. Ih broad terms, there is linkage between almost all Oil and Gas industry activity with the maritime industry.

For starters, the industry in Nigeria is increasingly moving deeper offshore such that the entire upstream sector is almost marine based. But beyond that, Oil production cannot be sustained without marine transportation and other marine support infrastructure that support both offshore and onshore operations.

Studies have shown that over 5% of Oil and Gas industry spend in the Oil and Gas value chain is channeled to the maritime industry in the cost of exploration, production, storage, transportation, processing and trading in Oil and Gas.” he enthused.