EMEA News
Confusion Over Lifting of Nigerian Tanker Ban Affecting Freight Rates and Trading
Unease and confusion over the lifting of Nigeria's ban on roughly 100 tankers from operating in its waters has pushed up freight rates and slowed trading activity, Platts reports.
West African Suezmax rates have reportedly risen by more than Worldscale 10 points since September 16, 2015, while the new requirement to sign a "letter of comfort" before loading at Nigerian oil terminals has hampered trading.
Ship & Bunker reported earlier this month that the lifting of the two-month ban had been accompanied by a statement that Nigerian president Muhammadu Buhari had approved the consideration of all incoming vessels "subject to receipt of a Letter of Comfort from all terminal operators and off-takers of Nigerian Oil and Gas as guarantee that nominated ships are free and will not be utilized for any illegal activity whatsoever."
"It is sort of impeding spot trading- and a knock-on effect on freight," said an unnamed source.
"It's a completely nonsensical proposal and the market reacts accordingly."
Critics have reportedly argued that the "letter of comfort" forces shipowners to take on responsibility outside of their control, especially as it demands that owners not participate in illegal activity.
Oil companies have purportedly been in talks with the Nigerian government over the issue, with many shipowners reportedly refusing to sign the document or providing alternate versions of their own.
"It is proving quite tricky - there are talks between the oil majors and NNPC (Nigerian National Petroleum Corp), looking at mutual agreeable wording [for the letter] - it's a question of who wants liability," said an unnamed trader.
"In essence, what NNPC wants is agreeable but it's a matter of legal wording that suits everyone."
A few days after the ban lifted, INTERTANKO also released a note cautioning members to be wary of the "letter of comfort" process, especially as the language released by NNPC was vague and not reliable.
