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FG to cut expenditure on crew boats, vessels by N273bn

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Nigerian built shipyard is to help achieve government’s target of 70 per cent local content by 2027

 

There is plan by the Federal Government to reduce its annual spending on over 20,000 ships working for the oil and gas sector from N360 billion ($600 million) to N273 billion ($420 million) in the next five years. The expenditure will be cut by 70 per cent between 2022 and 2027 in order to promote local content.

It was learnt that the oil sector spent $3.05 billion on marine vessels between January 2014 and December 2018, while 73 per cent of the amount went to crew boats, security vessels, diving support vessels and fast supply intervention vessels.

In order to halt the trend, Nigerian Content Development & Monitoring Board (NCDMB) said that the Brass Shipyard and other on-going efforts would help achieve the target of 70 per cent Nigerian content by 2027.

Also, findings revealed that most of the vessels operating in the oil industry were being taken to Ghana, Equatorial Guinea, Cameroun and other countries for dry docking because Nigeria’s local dry docks, which were built many years ago, no longer provide the required services.

According to NCDMB, the following vessels were imported into the country in categories: Crew Boat (CWB), Surfer (S), Security Vessel (SCV), Diving Support Vessels (DSV), Fast Supply Intervention Vessel (FSIV), Supply Vessels (SPV), Mooring Launch Vessels (MLV) and Shallow Draft Vessels (SDV).

Others are Accommodation Vessel (ACCV), Platform Supply Vessel (PSV), Anchor Handling Tug Vessel (AHTV), Tug Boat (TUGB), Multi- Purpose Vessel (MTPV), Pipe Lay Barges (PLB), nstallation barges (INSV), Jack-up barge (JUB), Lift Boats (LFB) and Seismic Acquisition Vessels (SAV). The board explained that Category II accounted for $393 million or 13 per cent, while $437 million or 14 per cent was for category three vessels.

In 2019, data by NCDMB on the industry’s expenditure on category 1 vessels was projected to be $1.65 billion or 51 per cent of the total spend, compared to $1.04 billion or 33 per cent for Category 2 vessels and $519 million or 16 per cent for Category 3 vessels.

It noted that categories 1 and 2 vessels accounted for 84 per cent of spends, saying that total spend was projected to be $641 million per annum. It would be recalled that NCDMB had said that it would partner with the Oil Producers Trade Section (OPTS) to develop an oil and gas industry marine vessels standards.

 

The Executive Secretary of the board, Simbi Wabote, an engineer, disclosed this in Abuja when he received the executive committee of the Ship Owners Association of Nigeria (SOAN) led by its President, Dr. Mkgeorge Onyung, who lauded the board for developing the revised marine vessel categorisation scheme and expressed hope that it would lead to more industry contracts for members.

 

However, the ship owners urged the board to relax certain condi  tions, which made it difficult for them to access the Nigerian Content Intervention (NCI Fund).

 

However, the executive secretary insisted that existing conditions on the NCI Fund would remain, noting that the board instituted those conditions to guard against failure of the loans and the entire credit scheme.

The association also sought the board’s intervention towards getting international oil companies to change the 10-year age restriction they placed on marine vessels that would be hired in the Nigerian oil and gas industry.

 

According to them, it took an average of five to six years for a contracted vessel to break even, saying that it would be highly unprofitable if such a vessel is barred from working shortly after it clocked 10.

 

In 2018, Wabote said in Lagos at a forum that the Nigerian Oil and Gas Industry Content Development Act (NOGID) 2010 had provided the framework for inter-agency collaboration and the enabling environment for vessel ownership to thrive.

 

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