Crude Oil: NIMASA set to change shipment terms of trade

The Nigerian Maritime Administration and Safety Agency (NIMASA) is making efforts to change the Terms of Trade for the shipment of Nigerian crude oil from Free on Board (FOB) to Cost Insurance and Freight (CIF).

The Director-General of NIMASA, Dr. Bashir Jamoh, disclosed this in Lagos, when he received a delegation from the Nigerian National Petroleum Corporation (NNPC) led by the newly appointed Group General Manager, Crude Oil Marketing Division, NNPC, Sir Billy Okoye.

Jamoh, who had recently paid a similar working visit to the Group Managing Director of NNPC, Mele Kyari, at the corporation’s headquarters in Abuja, expressed NIMASA’s appreciation of NNPC for accommodating the Agency’s interests in transactions where the maritime regulator relied on data from the national oil company.

The NIMASA DG also revealed that the Agency was working towards the implementation of a National Maritime Security Strategy to improve security in Nigerian waters and reduce the cost of shipping.

He commended the synergy between NNPC and NIMASA, saying, “Seventy percent of the Agency’s revenue comes through the sale of crude. Thus, cooperation between NNPC and NNPC cannot be over-emphasised.

“Since 2018, NIMASA has championed moves for a change in the terms of trade with regard to transportation of Nigerian crude oil, from FOB to CIF to ensure greater benefits for the country from its oil resources,” the Director-General stated.

“A technical committee involving NIMASA, NNPC, and other stakeholders would be set up to develop a template for the desired change, with workable timelines,” he added.

Under FOB trade terms, Nigeria has no reasonable control over the delivery of its crude oil as regards carriage, insurance, and other ancillary services. But under the CIF arrangement, the country maintains ample control over the distribution of its oil, which can be leveraged to enhance the competitive advantage of indigenous operators.