Ijeoma Agudosi/Agency Report
Nigerian vessel operators have lamented lack of transparency in securing crude transportation contracts in the country.
They also feared that dwindling oil price is forcing oil majors to review contract terms which has adversely affected their businesses.
Executive Chairman Norfin Offshore Petroleum Ltd Charles Udonwa noted that corruption and lack of transparency in contract/policies are rife and the industry in Nigeria also lacks relevant manpower.
For the Offshore Support Vessel (OSV) market, Udonwa said that securing contracts is a major challenge as the process is not transparent but based on relationships with who you know either at the oil majors or at NNPC.
“We have observed with sadness as companies with no vessels have tendered and were awarded contracts. We thought that with local content regulations, the lack of transparency in contract awards will be eliminated, but this was not the case.
Procurement managers at oil majors say they are abiding by local content regulations. They listed all the companies with vessels for a particular category without taking cognizance on whether the companies/vessels as registered are available, or on long term contracts with other oil majors.
As such, you can have your vessels in Nigeria with no chance of being awarded contracts,” he told Rigzone.
Udonwa said that the low oil price is affecting the offshore marine vessels support market negatively and looking ahead.
According to him, there will be surplus supply of oil as Iranian supplies return to the market.
To achieve recovery and sustainability in the offshore support market, there must be a balance in oil prices. I see the current trend of low oil prices continuing until September or October, after which prices may recover to $55 to $60 a barrel next year as global oil demand rises – due to growth of middle class in most countries.
Speaking further, he noted that as expected, due to the current low oil price, the oil majors are cutting back on operational cost, thus reducing vessel charter rates.
“We have seen a trend whereby most countries are adopting cabotage regulations to protect, sustain and encourage indigenous ship owners even in Africa.
So I think vessel oversupply is only felt in Asia and Europe. In some of the African or South American countries, vessels charter demand is stable.
We see better demand for platform supply vessels (PSV) and anchor handling tug supply (AHTS) vessels. I think the market is going through an adjustment to accommodate to the existing oil price. Most of the buyers and builders have reduced production. So by next year or the year after, there should be a balance in the availability of vessels because oil majors are taking in vessels that are not more than 10 years old.
A lot of vessels will be taken out for demolition and this will help the market to adjust itself” he said.