NNPC begins crude oil lifting

After five decades of its involvement in crude oil and gas exploration without involvement in crude oil transportation, the Nigerian National Petroleum Corporation (NNPC) has begun crude oil lifting through NIDAS International Enterprise.
Already, the company has shipped its first cargo of crude from Nigeria to Brofjorden, Sweden. The NNPC, had in December 2006 signed a joint venture agreement with Daewoo Shipbuilding and Marine Engineering (DSME) of South Korea, to establish a world class shipping company, for crude oil transportation.

An initial capital of $ 10 mm was then released for the joint venture business, in which NNPC was to acquire a controlling equity interest of 51 %, while DSME was to control 49 %. However, in February last year, the deal was sealed as NNPC, DSME and another company, EXMAR collaborated to establish NIDAS International Enterprises.
According to the corporation's spokesmen, Dr Levi Ajuonuma, the establishment of NIDAS was part of the NNPC's commitment to becoming a truly integrated oil and gas company involved in all aspects of the petroleum business, coupled with government's decision to change the present situation, where crude oil transportation in Nigeria has been dominated by foreign companies since 1958.

Besides, he noted that the initiative would boost capacity, revenue generation as well as employment opportunities in the country, adding that the participation of the state-owned company in the "transportation of crude oil and allied products would undoubtedly impact positively on the petroleum and shipping sectors in particular and the Nigerian economy in general".
"The ultimate objective of NIDAS International Enterprises Limited is to become the dominant shipping company responsible for the transportation of crude oil, LPG and other petroleum products from Nigeria including shipbuilding and maintenance. This will change the present situation where crude oil transportation in Nigeria has been dominated by foreign companies -- since 1958."

"The establishment of NIDAS as a crude oil transportation vehicle is part of a deliberate policy of government to create a sustainable channel of revenues for NNPC."
"The Nigerian government is committed to Nigerian Content Development and under this policy foreign companies are encouraged to engage the services of indigenous companies as well as utilize locally available materials in running their businesses. Therefore, crude oil traders should see it as an opportunity to support the Nigerian economy. It is expected that Nigerian crude oil lifters will, in the spirit of the mutual co-operation and cordial business relationship with NNPC, support the new company through the assignment of crude oil freight," he said.

When the joint venture was signed in 2006, the parties had agreed to establish an offshore office, which would be responsible for vessel operations and logistics. The first crude oil cargo was exported from Nigeria to Europe in 1958. The NNPC since then had no business in crude oil transportation as it only sells crude to traders, who in turn engage foreign companies in the lifting.
With this development, traders are expected to lift crude through NIDAS.