Nigeria’s state oil company NNPC has banned 113 oil tankers from the country’s waters, citing a directive from President Muhammadu Buhari.
The vessels, which include mainly VLCC crude oil tankers, are banned from calling at Nigerian crude oil terminals and also from Nigerian waters with immediate effect, said a letter circulated by NNPC, “pending a notice to the contrary by government”.
The letter, a copy of which was seen by Reuters and which gave no reason for the ban, was dated 15th July. NNPC did not immediately respond to requests for comment.
Since taking office in May, Buhari has been working to fulfil a campaign promise to tackle corruption, particularly in the oil industry. He has dissolved the NNPC board and ordered an investigation into a scheme through which the country swaps crude for oil products such as gasoline.
But some oil traders and vessel owners noted the list included ships that have not called at Nigerian ports for years, as well as several tankers, such as the Happiness, the Huge and the Diona, operated by Iranian group NITC, which has had little business for Nigeria for some time. A sample of 75 vessels on the list showed only around 14 had been to Nigeria or neighbouring countries in the last 180 days.
A trader with a major oil company said there was no obvious reason for the ban, while a source close to operations at Indian oil Corporation, a key buyer of Nigerian crude, said the refiner would definitely be impacted if the list is accurate.
“If the news is correct freight rates could go up and choice of vessels will be limited,” the source said.
India has been a top outlet for Nigerian oil in recent years as its light sweet crudes have been pushed out of the once-dominant destination, the United States, by the shale oil boom.
Some oil majors are attempting to introduce charter party clauses requiring the owner to warrant that the vessel is not subject to any Nigerian bans or restrictions due to failure to report any out-turn figures for prior voyages.
INTERTANKO said it had advised members to avoid such a provision.
“Owners whose vessels are blacklisted will have to be careful that they do not commit to trading to Nigeria whilst the threat of detention hangs over them,” said Stephen asking with shipping law firm Tatham Macinnes.
“It is likely further vessels will be subject to the blacklisting,” he said in a note.
Whilst we admire the effort of the new Nigerian regime to tackle corruption, the government must make it clear to everyone as to what is going on and allow legitimate trade to continue.