Oil companies under labour strike siege, count losses

Since January this year, the operations of six International Oil Companies and two indigenous oil companies have been disrupted on fifteen occasions leading to a loss of 30 productive days and billions of naira worth of oil income due to labour, employment related grievances BusinessDay has gathered.

American oil company ExxonMobil is embroiled in a showdown with the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) over the disengagement of 860 security support personnel in a bid to enforce an April 20th Supreme Court judgement that reversed their disengagement and ordered compensations.

The Nigerian Union of Petroleum and Natural Gas Workers, (NUPENG) in June threatened to embark on a nationwide strike due to the alleged sack of 300 of its members by some oil companies. It has now issued a fresh 7 day ultimatum after which it plans to embark on strike.

Chevron Nigeria is in a pickle as an industrial action is underway after over a hundred staff laid down tools in protest against being used as casual labourers after years of graduate traineeship with the company. In its third week, the intervention by the National Assembly and the International Labour Organisation has not yielded a truce.

“The sum of all these strikes is that we are making our oil and gas sector less competitive,” says Godwin Aigbkhan, an advisor at the National Competitiveness Council of Nigeria.

Nigerian oil unions have weaponised strikes actions to compel oil companies to improve welfare and working conditions for their members. BusinessDay analysis indicates that 90 percent of the grievances this year alone were based on employment related issues.

Under the cloak of collective bargaining, a disengagement of a handful of workers in one company, triggers country-wide strike actions. In December last year, the sack of 150 Exxon Mobil staff, led members of PENGASSAN to extend the industrial action to Chevron, Shell and ENI a subsidiary of Agip.

“I think this collective bargaining principle has to be reviewed in view of where the oil sector is heading and what is happening globally,” said Aigbokhan.

In 2016, the total number of oil and gas layoffs around the globe stood at 441,371, according to data compiled by Houston-based consulting firm Graves & Co. 178,466 (40 percent) were in the United States; 124,000 (28 percent) are published UK North Sea job losses; and 46,000 (10 percent) are published Canadian job losses.

This agrees with the Oil & Gas UK annual report, a trade body for the sector which said 60,000 direct and indirect jobs were lost across the industry in 2016, more than the 40,000 it had predicted.

A total of 351,410 jobs were lost by oil and gas production companies worldwide 2017, with the oilfield services sector bearing much of this burden, according to a new report released Graves & Co.

“I leave you to do your professional independent analysis and make your unbiased conclusions,” Udeagha Ogechukwu, a spokesperson for ExxonMobil said in response to BusinessDay questions of what it must feel like to operate daily under the threat of labour disruptions.

But the oil unions don’t believe there is another way, “which other better way do we have to press our demands?,” Abel Agarin, chairman of PENGASSAN, Lagos Zone, asked in response to BusinessDay’s question on exploring alternative dispute resolution mechanisms.

“When you don’t care for the workers how do you think you will be able to avert strike actions? Strikes cut across the whole fabric of the society because the country is not well managed. We have leadership problems in this country and until it is resolved, there would be strikes,” he said.

The Union leader further said that oil workers in other part of the world have better standard of living hence less penchant to press for wages, are provided social safety nets and protections by government which are lacking in Nigeria.

This agitation over wages does not take cognisance of larger issues in the sector. Currently, the threat of alternatives to fossil fuels is leading many oil producing countries to embark on reforms.

While the oil and gas sector is shedding jobs, more than half a million jobs around the world were created in the renewable energy sector in 2017 , bringing the total number of people employed in the sector to more than 10 million for the first time according to figures from the International Renewable Energy Agency (IRENA).

More than 70% of clean energy jobs are in just six countries – China, Brazil, the US, India, Germany and Japan and these are some of the countries the buy the bulk of the world’s crude oil. India and China, who buy much of Nigeria’s crude are investing in electric cars and leading the motion for an oil buyers’ club to buck OPEC’s grip on oil prices.