Home Effective bunkering policy can stop oil theft – Anyiam-Osigwe NOVEMBER 28, 2013 BY DAYO OKETOLA 1 Comment Anyiam-Osigwe | credits: File copy The Executive Director, Anyiam-Osigwe Group, the parent company of Nuel Energy Limited and PSTI Oil & Gas, Mr. Michael Anyiam-Osigwe, speaks on the likely impact of a government policy on bunkering operations. He spoke with DAYO OKETOLA Nuel Energy Limited, one of your group’s subsidiaries, has been considering a role in the country’s upstream landscape. How far have you gone with this? Your information is correct, though not under Nuel Energy, but under another subsidiary of ours. We have a joint venture relationship with Honeywell, United States and another Indian group that is involved in exploration and production. We are working closely with Honeywell in automation and control service as well as equipment for FPSO instrumentations. Is it true that your group is building a floating storage facility offshore Nigeria to boost its bunkering operations? What we do in the downstream sub-sector is basically trading. On the floating storage facility, you will remember that the bunkering business in Nigeria has been suspended for a while by the Federal Government and they are reviewing the policy position in order to re-issue licences for such operations. We have been involved in the business for a long time and we were one of the frontrunners in the business when the government first issued the licences. However, the bunkering business has been suspended for quite some time now because there is a misconception about it in Nigeria. When we talk about bunkering, people think it is an illegal activity and this is not correct because when you steal petroleum product/crude, that is not bunkering, it is crude oil theft. If you are doing illegal bunkering, it means you are engaged in bunkering operations without a licence. Bunkering is like running a gas station on the sea. It provides fuel such as marine diesel, pour fuel, lubricant and others to vessels on the sea. Sometimes, bunkering companies also provide fresh water to vessels on the sea. For this kind of operations, you will have service vessels, and a mother vessel that has your bunkering products. The small and shuttle vessels go to the refineries to take the products and fill your mother ship. Can you give us a brief background into the idea of bunkering? The word bunkering came into usage during the time when coal was used to fire steam ships. The bunker is a hole where coal, the fuel for the steam ship, was kept. When they say ‘bunker the ship,’ it meant take coal and fire the ship. But when they moved from coal-fired ships to thermal (oil), they still retained the word ‘bunker tank,’ that is, where you keep bunker fuel, whether coal or oil. That was how the word came. But in Nigeria, when you say someone is in the bunkering business, people think the person is a criminal. You can be involved in illegal bunkering, which means running your operations without being licensed by the Department of Petroleum Resources, which must license you for bunkering operations in Nigeria. Both the DPR and Nigerian National Petroleum Corporation supervise the business. The DPR gives licences to companies and it is based on this that you get allocation from NNPC to operate a downstream operation on water. But when you say bunkering in Nigeria, people think they are people who are bursting pipelines and stealing crude. This impression must be corrected. What do you think led to this misconception in Nigeria? To be honest, what I suspect is that when people steal crude oil, they use vessels to sell it to other ships on the sea. So, that becomes illegal bunkering because you are not licensed. It is also oil theft because you have stolen the crude and you are selling to users as though you are bunkering. This is because once you are doing a ship-to-ship transfer, it is called bunkering. In other words, once a smaller ship is pumping petroleum product into a bigger ship, that is how bunking operations work. With the level of oil theft in Nigeria, do you think there is a room for legal bunkering? I think that if the Federal Government issues licences and the legal bunkering business is reactivated, those who are engaging in oil theft will be easily isolated because there will be no excuse for ship owners to patronise illegal bunkering vessels. This is because they will be able to distinguish illegal vessels. The DPR will publish the licensed bunkering companies and the bunkering vessels will be labelled with the names of the ships and the operators’ names. So, if the Navy sees an unlicensed vessel that cannot provide documents to back its operations, they will arrest the ship. With this, it will be easy to isolate illegal operators and oil thieves. Do you think the government will ever reactivate the bunkering business considering the fact that it is widely believed that those behind oil theft are influential Nigerians? I know that the current administration is very interested in fighting oil theft, no doubt. I have heard the President lament about oil theft and he has even taken this campaign to the international community, telling them that they should treat stolen oil from Nigeria as blood diamond. One cannot really overlook that sort of problem. So, I think that if they make concerted effort, they will be able to isolate those in these illegal activities. Let’s say you are a ship owner and you have a container vessel coming into Nigeria, you will have to get fuel for your vessel somewhere. But if the licensed operators in the country are no more licensed to sell it to you, you will go elsewhere. Right now, Nigeria is losing a lot of businesses to countries where legal bunkering operations are been done. Once Nigeria re-establishes the bunker services and license companies, businesses will thrive. I don’t think any vessel owner will not patronise a company licensed for bunker services that will show them the certificate of quality, certificate of origin, and declare where the product is coming from. What other benefits will accrue to Nigeria from the lifting of suspension on bunkering operations? The benefits of reactivating bunkering services are enormous. Bunkering is a well-organised business, and you don’t operate without a permit. Besides, when you are going to bunker a vessel, the location of the vessel is indicated as well as where the meeting point will be. The DPR and the Navy will know exactly the number of ship-to-ship operations that are going on within the country’s water. Given the technology that is available, with GPS, every vessel offering bunkering legally in our waters can be monitored. The quantities are known. You go to the NNPC and you are given allocations, when you finish, you make returns of the volume of product you have sold. They are receipted for and you have to periodically show how you supply the product, which vessels you supply and how much you are paid. It will benefit the country if the bunkering service business is reactivated and genuine stakeholders are allowed to come in. It is a hospitality business in that when a vessel is coming into Nigeria and knows that it will get bunkered easily for fuel, lubricant and water, then freight will be cheaper. This is because the vessel will take less bunkers and carry more load. So, when they come here, they will do the refuelling and this will also pay the country better. Freighting goods to Nigeria will be cheaper and the consumers will benefit from this. What is your view on the country’s low refining capacity? The problem with our refineries did not start today. It’s been a long-term challenge to get the refineries to work optimally and these refineries are not necessarily young refineries. Sometimes, in today’s world, when you order spares, they probably have to go and start afresh to develop new moulds because that particular range of spares is no longer available. The way forward is for the government to look at the paradigms we are using in the power sector, where they have privatised successfully and see whether we can replicate that with the refineries. I don’t believe in the notion that the government cannot run anything and this is very personal. Because if the government cannot run anything, why should they be running the government. We should stop encouraging that notion that the government cannot run anything. I don’t believe that. The government should be able to run things efficiently because they are running the country. Follow our twitter @oluwainvolve1 @dsoba
Posted on: Thu, 28 Nov 2013 12:16:10 +0000
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