Managing Director, NLNG Ship Management Limited, Temilola Fatai Okesanjo in this interview with Eromosele Abiodun, posits that NLNG now has the capacity to man and supervise the construction of ships. Excerpts:
I want to start by asking what is responsible for the lack of manpower in the maritime sector. You started as a cadet and now a master mariner, can you tell us your experience, where we got it wrong as a nation and what should be done to remedy the situation?
This question actually goes to the root of maritime depreciation, or what I refer to as manpower supply and decline. I have a very important saying, which I believe will make everyone of us to know how it is happening. I always say to people things donâ€™t just happen, people make things happen. If you donâ€™t deliberately make things to happen, it will never happen. There was a time in this country where the government under the auspices of Nigeria National Shipping Line (NNSL), Nigeria Ports Authority (NPA), Green Line, and others believed that the maritime industry was very key, especially when you consider the ability of these aforementioned entities to bring in foreign reserves.
Government decided that it is going to involve itself in the training and development of maritime manpower, and in conjunction with the NNSL, NPA and other private companies. In fact Green Line was owned by late Chief Folawiyo at that time. They put in place the process of training cadets and developing officers. This was how a lot of Nigeria officers and cadets were developed. At that time, we had about 10 old ships built in Germany.
The government went further to establish a Maritime College in Oron, Akwa Ibom State in 1982. Also, at that time government directed the NNSL and other shipping companies to start training cadets. The first sets of cadets were recruited by the Ministry of Transport who actually established that college. They recruited people because they knew that they had to show example to the shipping companies that they are serious about increasing capacity of locally trained people. Before then, all the cadets were trained abroad. Many of my predecessors were been trained abroad. In view of that development these shipping companies have seen that the government was serious about the agreement to send which ever cadet they recruit to the new maritime college. This was how I was recruited by the NNSL. We were supposed to taken abroad; we were given sound training for three years, para-military, navigation and every other training.
The school then was being managed by United Nations, the United Nations Development Programme (UNDP). We had many lecturers that were foreigners and some were Nigerians. Among the first three batches I was the first to receive my captain certification. What we saw then was that a lot of Nigerians were produced and at that time, the federal government bought in additional 14 new ships built in Yugoslavia and South Korea. They were able to man those ships without having to employ foreigners. The NNSL was one of the biggest shipping lines at that time with almost about 24 ships. But unfortunately things went into reverse after the military coup. This then brought in a military person as the Managing Director, someone different from Oladotun, who was a seasoned shipping person. That was how the company went down.
Sir, let me take you back a bit. Recently, I was in Bonny to see the Marine Centre of Excellence (MCE), which is part of the Nigeria Liquefied Natural Gas (NLNG) contribution to drive knowledge. Can you tell us about the marine centre of excellence?
Maritime centre of excellence is something that has covered all that we have been doing within the context of bringing value to Nigeria, and NLNG within the maritime industry. The story I told you about how I went to sea actually shaped my belief in the need to bring the value of shipping back into the economy. By the time the fortunes of NNSL started going down, some of us who were in our middle career then, had to go abroad to work. Some of us had to complete our training by sponsoring ourselves including me.
We actually took the gauntlet then and spearheaded that trip. I came back after I had become captain and worked for some oil companies in Nigeria. I started with Texaco Overseas Company, and then I moved to Mobil as the marine Superintendent. Then I got a scholarship and went abroad to do my master of science at the World Maritime University. When I came back, I joined Shell and later NLNG. On getting to NLNG and knowing what it took me to build my career, I took other courses to develop my career. I joined the NLNG in 1999 and that period was when activities were been put in place to commence production and shipping.
I looked at what the founding fathers of NLNG have done within the context of shipping capacity requirement, which will be needed for the plant even before it was built. They founded the company known as Moridan Transport. They bought four ships NLNG Port Harcourt, NLNG Rivers, NLNG Lagos and NLNG Phnima. They bought these ships from the ship yards who at that time built them for another project, but those projects never took off. They borrowed money, bought them and lay off as far back as 1991 which was eight years before the NLNG plant was rebuilt. This showed that they had a foresight and the foresight has nothing to do more than taking complete value from the project.
What this implies is that you will produce the cargo and deliver it on the ship, on cost insurance and freight, because you then take the shipping value and we will be in control of the entire chain. You can imagine what that will have met if today Moridan Transport has 13 ships belongs to us. The same thing would have happened to the Nigeria National Petroleum Corporation (NNPC) if since 1960 is they have been shipping 2 million barrel per day using NNPC owned ships. You consider how many Nigerians will be employed, and how much that will have been brought in. As I speak to you, Bonny Gas Transport (BGT) has put a lot of dividends in billions of dollars to NLNG as a shipping subsidiary.
The foresight which the founding fathers of Bonny Gas Transport and Nigeria Railway Transport saw made me to say to myself that this vision will not be betrayed. It will be sustained and grow because I always believed that the essence of living is to add positive value to the society. And to that extent, the first thing I did was to reactivate the Nigerianisation of the fleets. The Nigerianisation project was started off in 1992, after the purchase of the ships and certain numbers of cadets were recruited. But the project stopped. Therefore, no more cadets were recruited. But coming back in 1999, I resituated that project and we have since been training cadets and bringing them up.
Today, we have developed captains at the BGTs. We have also developed superintendents from these individuals. We have developed managers; the people that will succeed me are cadets that were developed and have become captains, Chief Engineers and today; they are manning not only BGT, but also the major subsidiary that was setup to look after the technical activities of managing issues and terminals is NLNG Ship Management Limited. During the process of Nigerianisation, we not only train cadets. We also started the strategic development of our people in order to take over those core technical fields, that foreign companies were working for us at the time I joined the company. When I joined the company, Shell joined everything for us (Shell Trading and Shipping Company) which is a subsidiary of Shell. Yes we went through some phases, it was not so easy. You cannot just take away food from anybody. The first thing we did was to take over the commercial activities because Shell was in charge of chattering these ships outside.
We brought those ships and we started the project in 1999 September/October and we were managing the commercial activities. As we trained our people, we started what was known as the Ship management knowledge transfer. We could not start this until we have developed our people to Captains and Chief Engineers positions because these are the likes of people that you can make superintendents. A superintendent is required to take the ship management aspect of the shipping activities. Consequently, we had an agreement with Shell and we developed the first Ship knowledge transfer agreement.
That formed the basis of the knowledge transfer which has never been undertaken by Shell before. Prior to then, Shell was managing Brunei ships before we brought our ship. After we brought our ships they started managing Qataris ships. At every point in time, these two countries have been following our footsteps. We got the license to manage ships (documents of compliance). Today, almost four or five years after, we are growing that capacity.
Sir, may we know how many ships you have in your fleet at the moment and how your vessels are doing in the global market?
NLNG as a company chatters ships. What this implies is that it goes to ship owners to procure shipping capacity on a long time basis for the purpose of lifting its cargoes, which was contracted for delivery basis. What NLNG has also done was own a shipping company known as Bonny Gas Transport and NLNG also manages that company. In actually fact, that was my first job after I was promoted as a General Manager. But I re-integrated everything and you have a division known as shipping division which was managing everything. I was managing BGT and the various developmental activities which eventually complemented into the setting up of NSM. We started NSM as a mining company and we started to gradually move the activities in the shipping divisions to NSM, because the vision was to have all the companies that are able to provide all the shipping activities, and support the growth of BGT and NLNG. As we progressed in that, the ships of BGT became fully managed by NSM.
So BGT today has 13 NLNG carriers. It started with four old vessels which I told was acquired, another two old vessels were brought in when we were about to start the project procedure from Duke Energy in America (that was the Abuja and the Edos). These were the six old ships which we started the project with under the auspices of BGT. Those ships were chattered to NLNG and as we went to train three, three more ships were acquired. The first six ships were to service the productions coming from train one and two. As we went to train three, we built three new ships. But all of them were still what was known as still steam ships. As we went further in trains four and five, we required eight ships to carry the productions from trains four and five because they were bigger trains.
At that time, a decision was taken to capture half of that shipping requirement from Bonny Gas Transport and half from a third party shipping company. This was how Bergeson was able to supply four brand new ships, also steam carriers to NLNG. While BGT supplied four addition ships to NLNG. So if you look at the six for trains one and two, three for train three, making, plus four for trains four and five making 13. These were the ships that were chattered from BGT. But four additional ones were chattered from Bergeson for trains four and five and we went into trains six additional ships four from Bergeson and two from NYK were also chattered. So there were three major companies chattering ships for NLNG.
These were 13 ships from BGT, eight from Bergeson and two from NYK making a fleet of 23 NLNG cargoes. But there was one addition one chattered from Shell Bermuda Oversees Limited. This was old and we had to return it to Shell Bermuda Oversees Limited, therefore it will have been 24, but because we now have bigger ships, we decided to stay at 23. In the smaller fleets we were having 24 ships against four ships. But as we decided to replace the six old BGT ships, which we started with train six with, those ships were 125,000 capacity and we replaced them with 178,000 capacities.
The additional one ship which could have made it to become 24 was no longer required because we now have six large vessels. This is why today NLNG as a company is chattering 23 carriers, comprising six brand new ground floor diesel electric ships which is the latest. One of the things we also did was that the constructions of these ships were hitherto done for us by foreigners. But we also developed our people and their capacity. Iâ€™m happy to announce to you that these ships their construction was done and completed by Nigeria Sight Engineers, which also shows that we have not only grown our capacity to man ships, but to manage and supervise the construction of ships as Nigerians.
Sir, our readers would like to know more about the six new vessels that you have built
These six vessels have served their purpose. The money that was realised in chattering these ships out was been used to run the NLNG before the project started. Issues went into the project and they grew forward to a very old age of 35 which is unusual. But they are still evergreen and because we now have emission rules, you now have certain compliance in terms of age. We had to retire the ships because we had to retire them, we had two alternatives. First, go out and chatter from other third party or make BGT to get these new ships.
We did what was known as economic replacement and assessment. We did all the analysis. The management and the board found out that it is more profitable for the company to undertake this investment for the purpose of keeping the value in the house. Before now, whenever BGT wanted to borrow money to buy ships, it will rely on the collateral of NLNG and some other parties. But BGT on its own and based on other assets, was able to collateralise a loan of over N1.5 billion dollars to purchase these six ships. They have the latest designs and with the state of the art technology. Four built in Samsung heavy industry and others by Hyundai.
As the newly appointed Managing Director of NLNG Ship Management Limited, what are the things you plan to introduce going forward?
The good thing about NSML is the fact that it has become a very important pillar not only in Nigeria NLNG. But in the Nigeria shipping industry, today it is the only outfit that manages ships in the country such as NLNG cargoes. It is also the only outfit that manages a marine terminal. It is the one managing the activities of NLNG and we do it 100 per cent. Our vision is that NSML will become a vision of positive revolution for the shipping industry. We foresee a future whereby NSML will positively influence the growth of shipping such that Nigerian shipping companies are not only able to compete and stand their own, but will be able to bring value and revenue to this country.
You talked about Maritime Centre for Excellence. NSML is the one managing what I refer to as the first and only maritime research centre in Nigeria today. MCOE is a product of many positive outcomes of the six new ships. What I did not mention here is the Nigerian industryâ€™s beneficial activities such as the BGT project. For the first time, paints were developed from the country by two indigenous companies and shipped to South Korea for the purpose of constructing these new vessels. Electric cables were developed, produced in the country, and shipped to South Korea for the purpose of using them in these six new vessels. Other things such as furniture were developed by Nigeria companies.
We also trained 600 Nigerians in the act of wielding, construction and many of them participated in the construction of these ships. One of the outcomes of the Nigeria content is the supply of simulators, which are electronic equipment and facilitators that can be used for navigation and cargo which we also got supplied worth over $4 to $5 million and the training of our people in the use of these simulators. MCOE came into been for the purpose of research and development, using cutting edge technology. Like I said to you, MCOE was able to simulate and support the design and construction of ships. They will be able to support supervision of the construction of ships. They will be able to simulate port development and channel, if you want to construct anything within Nigeria ports they have all the facilities it takes to build ships. If you want to build ships they can design for you.
Even the Vessel Tracking Monitoring (VTM) system, they have all the facilities, we have a VTI base in Bonny. We not only have the simulators, but we have trained people on to use those facilities. We can support NPA and many of the outfits in the country, including Nigeria Maritime Administration and Safety Agency (NIMASA). One of the things we are also thinking about is how we can come to the aid of the shipping industry in bringing about the complete development of cadets which NIMASA have trained in order to ensure that these guys were not just made to be roaming about, but provide opportunity for them to follow up on their career and pick up whatever they have envisaged in their minds. I look at MOCOE as the engine of revolution and NSML will be the outfit upon MOCOE will create this revolution in the country. That is the vision I intend to follow.
Sir, during your discussion about your shipping business, you talked about NLNG trading from Cost Insurance and Freight (CIF) basis. Going back to the maritime sector, we know that the involvement of large ship owners in the lifting of crude oil has been at the lower ebb. Also, we know that our crude is being lifted based on Free On Board (FOB) basis. Using NLNG as a model, and what is happening in the maritime sector, is changing our oil policy desirable at this time and what can the government do to encourage ship owners in the country in the lifting of crude oil?
Like I said, there must be a vision, based on that vision you develop strategies for pursuing the objectives of that vision. The vision of the founding fathers of NLNG was that we will control and take value for the entire chain. We will liquefy gas and we will produce LNG. We will sell using our ships, so in everything we will make big value. You can also take value by owning the means of delivery. When you look at NLNG, one of their duties is that they chatter ships. So when they chatter the ships, they are still in control the value chain, because they chatter those chips on a long term basis. So they will take value from delivery using ships that you have chattered.
Therefore they control the freights, not only do they chatter ships, they setup a shipping company. They train their people to manage it. Again, they are taking value from owning as different from the value of freighting using chatter ships. They are providing jobs, which is another value. They are value line everywhere along the chain. This was why I said in my own time that vision will not only be sustained, but be nurtured. It took me 10 years to convince the shareholders to replace the six old ships using BGT. Rather than having other suppliers supply it.
As a nation we must have vision, we must ask the NNPC what is the vision when we say we want to be selling crude oil. Nations such as Saudi Arabia selling crude oil, they have Saudi Aramco which has ships. Kuwait and Iran have ships. Before the demise of Iraq, they had ships. This shows that these nations knew exactly what they wanted to derive from the business of selling crude oil. It is never too late; all we need to do is to be deliberate in developing strategies. The good thing about Nigeria is that we are not short of capable hands that can put these strategies in place and make it work, provided that the interest of the nation is placed at heart and we are purposeful about it. if we are not purposeful about it or donâ€™t have the interest of the nation at heart, whatever we want to do, one way or the other self-interest will come in and that is the good thing about NLNG.
NLNG believes in people, they train people and give them what it takes to do what will be in the best interest of the Nigeria NLNG and the country. This is why I and my colleagues have achieved whatever it is that we have achieved such as the ship management knowledge transfer, the setting up of the maritime college of excellence, and the building of the first Vessel Traffic Information Management System (VITMS). These are no mean achievements but this should have been possible without the support of NLNG shareholders and the believe in the capacity of Nigerians to achieve this. That is what federal government and NNPC needs to have.
Sir, let us focus on the security issues on the Nigeria waterways. We heard that there are so many issues around Bonny, kidnapping and all that. How would you describe the implications of these on Nigeria shipping business and how much do you spend protecting your vessels on yearly basis?
The question you have asked bothers on two aspects. The first has to do with security of ships in Nigeria waterways or Gulf of Guinean and the other has to do with national security. I will not speak on national security because I donâ€™t have what it takes. It is a very serious issue, what I can tell you is that to the best of my knowledge for 10 years, the Gulf of Guinean has been declared by the International Maritime Organisation (IMO) as high risk area. What this means is that ship entering into that water will have to take additional security measures to protect the ships and the people serving onboard. One of those things you will be exposed to is additional insurance.
You also pay some bonus to crew in order for them to agree to come to that area. You can imagine what that will have been for the ships coming Nigeria, particularly for NLNG which daily transits that water in order to come into Bonny terminal to lift its cargo and the same for the companies under us. The second problem is what if with all these measures that you have you get to a situation where the risk has increased within the context of daring pirates and we have seen many ships been hijacked and what you donâ€™t have today is the use of what is known as security vessels which has become very prominent in Nigeria.
When NLNG started there was nothing like security vessels. But today, our vessels cannot go out with the support of security vessels. What it then means is that the cost of shipping activities in the country will have to increase because somebody has to bear this additional cost. We can now take and check the samples, then satisfy ourselves in what it takes to hire a security vessel ranging from the size of that vessel and how many we have to hire in order to successfully transmit bonny channel into the sea, without any incident. The same for many other companies who are transiting in high risk in order to evacuate their products, in terms of counter marine activities.