Wednesday, September 17, 2014

Nigerian oil workers start strike, oil exports at risk

Nigerian oil protests
Photo: Thousands of protesters have demonstrated in Nigeria's commercial capital Lagos. (AFP: Pius Utomi Ekpei)

Oil workers in Nigeria started an indefinite strike Tuesday that could disrupt oil production and exports from the OPEC member, said officials of the unions and state-owned Nigerian National Petroleum Corp.

The unions took the action after failing to resolve a dispute over pensions and other issues.

"Today, we have called our members out to begin an indefinite strike until management addresses our demand for a complete overhaul of the NNPC pension scheme, which in its present form is depriving our members of their full dues," a spokesman for the NNPC branch of Nupeng and Pengassan oil workers' unions told Platts.

NNPC's headquarters in Abuja has been shut to workers and visitors, the union official said.

Platts could not immediately confirm the situation in other NNPC offices, particularly in the oil-producing Niger Delta region.

The union spokesman said that if NNPC management failed to meet workers' demands, "in the shortest time possible, oil export terminals will be shut down."

NNPC has had difficulty meeting its portion of cash call contributions to funding joint venture operations with its foreign oil partners, a source said. For pension contributions, the company has fallen Naira 85 billion ($531 million) short, according to the source.


NNPC spokesman Ohi Alegbe said Tuesday morning the company was prepared to address the workers' pension concerns and to end the strike.

"NNPC is taking steps to avert a looming industrial action by the corporation's arm of the National Union of Petroleum and Natural Gas Workers and the Petroleum and Natural Gas Senior Staff Association of Nigeria," Alegbe said.

"While acknowledging the existence of some funding gaps in the scheme, measures have since been put in place to steadily bridge the funding deficit, which stood at N298 billion in 2010," he said.

NNPC manages the government's interest in joint ventures with foreign firms, including Shell, ExxonMobil, Chevron, Eni and Total. It accounts for about 90% of Nigeria's 2 million b/d of oil production.

NNPC staff monitors and approves crude shipment documents at the terminals in conjunction with industry regulators.

Officials also said Tuesday the NNPC strike could hit gasoline imports and distribution as the corporation accounts for 60% of the Nigeria's gasoline imports.

"Management called on members of the public not to engage in panic buying [of gasoline], assuring further that plans are on top gear to address the situation," Alegbe said.

--Edited by Meghan Gordon,

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