Global Ship Owners Protest Nigeria’s Ban on Crude Carriers

International crude tanker owners have strongly protested against Nigeria's ban on 113 vessels from loading at its oil terminals, with some oil companies seeking assurances that the hired vessels are not on the ban list, according to the International Association of Independent Tanker Owners (Intertanko).

The Nigerian National Petroleum Corporation (NNPC) had issued a letter on July 15, citing a directive from President Muhammadu Buhari, which said the vessels, mainly VLCC (very large crude carriers) crude oil tankers, were banned from calling at Nigerian crude oil terminals and also from Nigerian waters with immediate effect.

However, industry association Intertanko, whose independent members own the majority of the world’s tanker fleet, said in a letter to NNPC, dated July 22, that there were no “evidence or grounds” given for the ban, reported The Economic Times of India.

Instead, the owners want the oil companies to share their oil loading and discharge figures in case this information is sought by the Nigerian government.

“Members (say) some oil majors are attempting to introduce charter-party clauses requiring the owner to warrant that the ship is not subject to any Nigerian bans or restrictions due to failure to report any out-turn figures for prior voyages," Bill Box, Intertanko's manager communications and external relations, was quoted by Platts as stating yesterday. US-based Platts is an information provider on energy and metals.

Intertanko has advised its members to avoid any such clauses in the charter-party agreements, Box said.

“On the contrary, charterers should be asked to warrant that they will ensure that out-turn figures are provided in Nigeria,” he added.
The International Association of Independent Tanker Owners or Intertanko is one of the largest grouping in the shipping industry with 207 full members and 285 associate members, and a registered fleet of over 3,000 tankers of over 270 million DWT (deadweight).

Intertanko has issued a letter of protest to NNPC's London office, with copies to the Nigerian High Commissioner and the country’s Alternate Permanent Representative at the International Maritime Organisation (IMO).

“There is no reference to policies and requirements and no evidence or grounds are given for the ban,” the letter addressed to NNPC said.

“Many of these ships have not traded (in) Nigeria for a number of years and some have never been there,” Intertanko's General Counsel Michele White said in the letter seen by Platts. In some cases, the ship has changed ownership since the last call in Nigeria, Box added.

These bans should be lifted with immediate effect until grounds and evidence for the ban have been given to each vessel and its owner or operator, and the owner or operator has had an opportunity to respond, White said.

However, the ban has not affected the loading schedules in Nigeria, prompting rates to move off its highs. The key PG-Japan rate was assessed w11.5 points lower Wednesday at w77.

“Government officials have cut all communication but so far there is no emergency,” a source said with reference to Nigeria’s current loading programme for crude oil.

Whatever the circumstances, as a result of the NNPC directive, these vessels will not be permitted to operate in Nigerian waters.
Meanwhile, the World Bank is nudging up its 2015 forecast for crude oil prices from $53 in April to $57 per barrel after oil prices rose 17 per cent in the April to June quarter.

According to AFP, the forecast was contained in the bank’s latest Commodity Markets Outlook released on Wednesday.

The bank said energy prices rose 12 per cent in the quarter, with the surge in oil offset by declines in natural gas and coal prices.
However, it said it expected energy prices to average 39 per cent below 2014 level.

“Natural gas prices are projected to decline across all three main markets including the United States, Europe and Asia.
“Coal prices are likely to fall 17 per cent”, it said.

Excluding energy, the bank reported a two per cent decline in prices for the quarter and forecast that non-energy prices would average 12 per cent below 2014 levels this year.

“Demand for crude oil was higher than expected in the second quarter. Despite the marginal increase in the price forecast for 2015.
“Large inventories and rising output from OPEC members suggest prices will likely remain weak in the medium-term,” said John Baffes, Senior Economist and lead author of the report.

The bank said Iran’s new nuclear agreement with the US and other leading governments, if ratified, would ease sanctions, including restrictions on oil exports from Iran.

It said downside risks to the forecast included higher-than-expected non-OPEC production supported by falling production costs and continuing gains in OPEC output.

It also predicted possible upside pressures from closure of high-cost operations as the number of operational oil rigs in the US remain down 60 per cent since its November high.