Due to the federal government’s decision to demand for letters of comfort from vessels lifting crude oil from Nigeria following the reversal of a recent ban on 113 oil tankers, vessels willing to come into the country now charge exorbitant rates.
The order to ban the 113 vessels was carried out to curb crude oil theft.
The Nigerian National Petroleum Corporation (NNPC) had in a letter last July conveyed the decision of the Corporation to ban 113 vessels, mostly very large crude carriers (VLCCs), from Nigerian loading terminals and territorial waters, citing a directive from President Muhammadu Buhari.
The letter, which was addressed to all operators of the 27 crude oil loading terminals in Nigeria, said the ban took immediate effect.
But following pressure mounted by the International Association of Independent Tanker Owners, whose members were mostly affected by the ban, the corporation early this month lifted the ban.
In a letter signed by Mele Kyari, NNPC’s Group General Manager in charge of Crude Oil Sales Division, the President approved the consideration of all incoming ships subject to a letter guaranteeing that they were free and will not be used for any illegal activity.
The letter added that the President had directed a review of activities of all affected vessels to determine culpability in illegal operations in Nigerian territorial waters.
The letter also directed all incoming vessels into Nigerian waters to provide a “Letter of Comfort” from export terminal operators and buyers of Nigerian crude as “guarantee that nominated vessels are free and will not be utilised for any illegal activity whatsoever.”
But B K Namdeo, head of refineries at India’s Hindustan Petroleum Corp (HPCL), was quoted as saying that no ship owner was willing to bring vessels to Nigeria because of the “letter of comfort” that is demanded by the NNPC.
According to Namdeo, HPCL will be cautious about buying Nigerian oil, adding that the company was still scouting for a vessel to lift a cargo for early October loading after the federal government sought a “letter of comfort” from shippers.
“We are finding it difficult to book a vessel to lift Nigerian crude … We will be cautious in future while deciding about crude of Nigerian origin,” Namdeo said.
He said his firm was unsure whether it would be able to lift a very large crude carrier of Qua Iboe crude on time.
“Nobody is coming forward to offer the vessel and whoever is willing to go to Nigeria is asking exorbitant rates,” he added.
HPCL bought the two million barrels of Qua Iboe from Totsa, a trading arm of France’s Total, for October 7-8 lifting on a free on board (FOB) basis.
This means that the buyer pays the cost of marine freight, insurance, unloading and other costs to destination.
It is also reported that the Indian firm chartered the Ridgebury Progress (a crude carrier) to lift the cargo, but the vessel owner refused to sign the “letter of comfort” sought by the NNPC.

Oluchi Ugboaja
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