NIMASA ISSUES FRESH REGULATIONS TO FOREIGN OIL AND GAS FIRMS

NIMASA ISSUES FRESH REGULATIONS TO FOREIGN OIL AND GAS FIRMS

A fresh set of regulations to enhance enforcement of the Cabotage Act and stem its abuse by foreign oil and gas companies have been issued by the Nigerian Maritime Administration and Safety Agency (NIMASA).

In a Marine Notice (New Cabotage Compliance Strategy – NCCS) issued last week, the agency requires all oil and gas operators and international oil companies are to submit their vessel chartering, marine service plan and demand forecasts. This is contained in a Marine Notice issued by the agency.

The Marine Notice followed the consensus reached at the meeting between NIMASA and Oil Producers Trade Sector (OPTS) of the Nigerian Chamber of Commerce on July, 2018, towards the actualization of the objectives of the Coastal and Inland Shipping (Cabotage Act) 2003.

By provision of the Notice, it has become mandatory for all oil and gas operators to submit their 5-year marine service/vessel chartering or engagement plans. The schedule of existing contract or ongoing marine projects detailing the particulars of each contractor (including nationality, vessel ownership profile, head office address, etc) should also be made available.

Details of type of vessels/equipment, vessel classification, zone or location of engagement, vessel ownership, crewing, maintenance and flagging/registration plans are also needed. Other information required are nature and scope of contract/service, duration of engagement/tenure (commencement and exploration dates) and contract value in both local and foreign currencies.

All oil and gas operators are required to advertise for Expression of Interest and Prequalification of Tender for award of marine contract/vessel engagement in at least three national newspapers and the Nigerian Petroleum Exchange (NIPEX) platform, citing compliance with Cabotage as a pre-requisite for award of such marine contract and vessel engagement in Coastal Trade. The publication in respect of this is to make allowance for a minimum of three months’ bid due date.

All oil and gas operators shall inform NIMASA in writing of the date of expiration of every existing marine contract six months prior to the expiration of such contract.

Henceforth, the Marine Notice demanded, all oil and gas operators must obtain NIMASA’s Certificate of NO OBJECTION prior to award of any marine-related contract to a foreign firm on the basis of non-availability of local capacity to satisfactorily execute such job.

NIMASA emphasizes that it has mandated all Cabotage officers to ensure strict compliance with this directive. NIMASA’s Head of Cabotage Services Department, the Notice says, is available if further information is required.

Passed into law in 2003, the Cabotage Act has been mired in controversy over what the indigenous shipping community say is the serial abuse of it’s provisions by foreign-owned companies in the oil and gas industry.

The major loophole exploited in the Act is the provision for waivers to be granted to companies where it is determined that local capacity is inadequate or unavailable. With the power to grant waivers domiciled in the Federal Ministry of Transportation, the window has been used to continue to circumvent the enforcement of the law.

The Ship Owners Association of Nigeria (SOAN) had been in the forefront of the campaign to initiate proactive measures to restore sanity in Cabotage services.

Culled from Business and Maritime, West Africa.