Why Nigerian Shipowners May Lose Out From $19bn Dangote Refinery

NIGERIAN indigenous Shipowners under the aegis of the Ship Owners Association of Nigeria (SOAN) has warned that except the Nigerian Government addresses the lack of capacity confronting indigenous shipping, foreign vessels might dominate freight carriage of crude oil at the $19bn Dangote Refinery when the facility becomes operational by mid 2023. 

Speaking with the Nigerian Tribune in Lagos, President of SOAN, Dr. MkGeorge Onyung, explained that the Dangote Refinery is located within the nation’s waters, and thus falls under the country’s Cabotage regime. 

According to the SOAN President, “The Dangote Refinery is set to be operational by mid 2023, and once that facility becomes operational, there will be increased activities there as regards vessel call for petroleum products lifting. 

The question we indigenous shipowners keep asking ourselves is that, are we ready to partake in the crude oil lifting business that will boom around the Dangote Refinery by mid next year? 

“We are definitely not ready due to a lack of capacity. Indigenous shipowners are struggling to make ends meet. The $350m Cabotage Vessel Financing Fund (CVFF) which is expected to improve capacity for indigenous shipowners is yet to be disbursed. 

Government keeps playing politics with the disbursement of the CVFF. Is this how we will continue until the Dangote Refinery becomes operational? 

“If we continue this way, foreign vessels will be the major players at the Dangote Refinery. Imagine foreign vessels scooping away all the benefits from an investment that is in our country. We have told government to disburse the CVFF to enhance local capacity. We want to be active players and not spectators when the Dangote Refinery becomes operational, but without funding, this might not be possible.

“Government needs to disburse the CVFF now to ensure that Nigerian shipowners are not mere spectators when the Dangote Refinery becomes operational.”

Dangote’s 650,000 barrels per day (bpd) oil refinery being built in Nigeria is due to begin production by the middle of 2023. The refinery, which is being built at a cost of $19billion in Lagos, has 4.74 billion litres storage capacity and 75% of its products will be moved by sea within Nigeria.

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Author: Newstopz400

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