3,000 Oil Jobs Under Threat as Labour Dispute Threatens Nigerian Content Policy


By Ejiofor Alike

The raging labour dispute between the oil workers’ unions and Nigerian indigenous firms that have committed huge resources to develop local capacity and capability in line with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, has threatened 3,000 jobs in the oil and gas sector, THISDAY has learnt.

THISDAY gathered that the dispute has already led to the sack of about 1,000 workers by indigenous oil companies and oil service firms, with 2,000 more jobs on the line as these firms downsize in a bid to curb exposure to the unions’ excessive demands.

While the indigenous service providers struggle to retain indigenous workers they staked substantial investments to train under the Nigerian Content Law, these firms have alleged that the labour unions’ demands for unionisation of workforce, payment of huge remunerations for their members, and payment of fat exit packages to disengaged staff have posed a great threat to their survival.

However, the Chairman of Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor, said the association had scheduled a meeting Wednesday this week to look into series of complaints by workers and employers involved in the disputes.

Okoroafor promised that PETAN is working with all parties in the disputes to address the worrisome development, adding that over 15 other companies outside PETAN are also affected by the labour dispute.

He blamed the low activity cycle that affected the financial capacity of most service companies in the country for the crisis, stressing that labour leaders should take cognisance of the prevailing crisis in the industry in the context of the current economic condition of the country and collaborate with investors to revive the sector.

Investigation revealed that the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is on a collision with over 18 companies that allegedly failed to abide by their Collective Bargaining Agreement (CBA) on payment of remuneration to their members, unionisation of workforce, reinstatement of sacked workers and payment of huge exit packages to disengaged staff.

The National President of PENGASSAN, Mr. Francis Olabode Johnson, did not respond to calls and text messages but the Public Relations Officer of the association, Fortune Obi told THISDAY yesterday that the labour disputes in the companies were caused by the financial mismanagement of these firms by their CEOs and not labour’s demands.

“The first thing the CEOs of the indigenous companies do when they win contract is to go outside the country and buy houses and come back to tell their staff that there is no money. There are collective bargaining agreements (CBAs) between PENGASSAN branches and the individual companies. But instead of the indigenous companies to abide by the terms of the CBAs, they give all kinds of excuses. Basically, Nigerian companies do not respect CBAs or obey labour laws. When the workers invite them to a negotiation table, they will not honour the invitation. We are writing to companies that do not respect the laws. If the IOCs disobey our laws the way indigenous companies disobey our laws, Nigeria’s oil and gas industry would not have advanced to this stage” Obi explained.

He reminded the local operators that the local content policy they now enjoy was championed by PENGASSAN.

Obi argued that PENGASSAN is a responsible body of professionals who cannot work for the collapse of companies where their members earn their living.

However, the indigenous firms alleged that some of the workers demanding juicy severance packages are leaving for foreign multinational oil service firms after the indigenous firms had employed them as pupil engineers and trained them to develop the requisite skills to tackle complex jobs in the industry.

The chief executive officer of one of the indigenous firms told THISDAY at the weekend that the workers who seek greener pastures to work for foreign companies, also demand full exit entitlements from indigenous firms, thus fueling a collision between the indigenous operators and the workers’ unions – PENGASSAN and the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG).

It was learnt that 18 companies are currently battling to save their investments from the unions over unresolved entitlement issues, while about four companies based in Port Harcourt, Rivers State, have received demand notices from the workers’ groups.

One of the companies, Ciscon Nigeria Limited, it was learnt, has allegedly threatened declaring insolvency, citing hostility from labour unions in the face of downturn in upstream operations.

In a petition addressed to PETAN, some of the disengaged workers of the company stated that the Chairman and Chief Executive of Ciscon, Mr. Shawley Coker, had in a memo tagged ‘Ciscon-The Choice,’ sought to discount duly earned terminal entitlements of staff, threatening that where that option was not agreeable to them, then the company should be “shut permanently.”

Coker was said to have explained that the company had to downsize in response to activity downturn in upstream operations after weak oil prices and low oil income forced the IOCs to defer and in some cases, cancel projects.

One of the firms also berated the leadership of PENGASSAN “for being too parochial in their appraisal of prevailing situation in the industry,” urging them to “get clear understanding of their roles as partners in building the nation’s economy and not to align with agents that demolish business structures that create jobs.”

Also speaking on the issue, the Managing Director of Warri-based indigenous oilfield services contractor, Weafri Well Services, Mr. Chris Onyekwere, said he had pioneered a campaign against poaching of trained employees by foreign companies and decried what he described as “the glee with which workers indigenous firms spent fortunes to train walked over to foreign competitors on the promise to work abroad.”

Onyekwere argued that regulators should insist that “poaching must carry a condition that the foreign employers must first offset the training cost of the employees they seek to pull out from indigenous companies.”

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had acknowledged the existence of the conflict and pledged to wield into the crisis and find a meeting point between the employers and the labour leaders.

Speaking at the recent maiden edition of the Nigeria International Petroleum Summit (NIPS) in Abuja, Kachikwu also stated that the federal government was working to attract the right level of investment capital to keep the Nigerian Content scope of the industry vibrant in the short to medium term, adding that it would require over $100 billion worth of investments to recalibrate activity the industry.

“I have appealed to the unions to bring labour issues in the industry to me for initial dialogue before they become labour issue. My advice is that ultimatums and work stoppage are something that must be used very sparingly.  In a typical year, we lose a lot of time because we are back to back with strike. It is almost like that the organised labour in the industry believes that the only way to get attention from us is to go on strike. But it shouldn’t be. When we are not doing things right we need to correct ourselves,” Kachikwu had said.