Why Elf Operations Are Shut Down
Production losses may linger
Fresh facts yesterday showed that Elf Petroleum Nigeria Limited shut down its Nigerian operations because company's senior staff planned a showdown with the management over alleged abuse of expatriate quota.
The workers, under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) also yesterday, halted attempts to restart crude oil production in all the company's fields in the Niger Delta, insisting that the management must first address their grievances.
Elf produces about 235,000 barrels per day (bpd). The Nigerian government owns 60 percent of this output.
THISDAY checks revealed that contrary to earlier claims of technical hitches, the company decided to shut down its entire crude oil production last Friday, to forestall a show down between protesting staff and expatriates manning the production facilities.
It was reliably gathered that the core of the foreign production superintendents manning the facilities had early last week, written the management that the Nigerian workers planned to attack them.
"On the strength of this letter, the management decided to evacuate the expatriates and close all the facilities," a PENGASSAN source disclosed.
Explaining the cause of the workers' grievances, the union official said the workers had reached an agreement with the company in October 2002, where management promised to assign the production superintendent positions to Nigerians this year.
The ceding of the post was to be done on rotational basis, he said.
"But in June this year, management came up with the directive that there are certain positions it cannot allow Nigerians to man," the source said, adding that the Nigerian employees had actually given a hint to "make life unbearable for the expatriates."
PENGASSAN also condemned the closure of oil production on grounds that re-starting the fields would gulp huge sums of money. "The Federal Government will be expected to pay 60 percent of such unnecessary cost," he said.
THISDAY further learnt that talks between the management and the workers' union held yesterday in Port Harcourt on the issue ended in a deadlock. Sources close to the meeting, brokered by the Ministry of Employment, Labour and Productivity, informed that the parties could not reach agreement on the workers' demand and had agreed to meet again today
Elf Petroleum, the Nigerian subsidiary of French oil giant, Total, was the latest multinational oil company operating in Nigeria to be embroiled in the crisis of expatriate quota abuse.
Last year, Nigerian workers of US oil major, ExxonMobil, went on two-day strike to protest influx of expatriates into the company as well as the down grading of senior management positions held by Nigerians.
Presently, Shell Petroleum Development Company (SPDC) is at logger-head with its Nigerian workers over the planned re-organisation in the company. The workers claimed the plan has the primary objective of reduction in the number of Nigerian staff to be replaced by expatriates.
As the Elf production shut-in lingers, the company which produces the oil in joint venture partnership with the Nigerian National Petroleum Corporation (NNPC), might have lost a total of 1.41 million barrels of crude or $50.76 million.
Oil exports account for more than 90 percent of Nigeria's foreign exchange earnings. The latest development represents a blow to the country's bid to raise oil production to meet the call by the Organisation of Petroleum Exporting Countries (OPEC) for more oil.
Meanwhile, the upswing in oil prices triggered by the Elf industrial crisis as well as problem in the Middle East, continued yesterday with the Light sweet crude traded for 39.43 per barrel up from $38.35 per barrel on Monday.
Just like the Nigerian Elf production hitches, oil exports from Iraq which were halved by sabotage last weekend, were yet to resume as at yesterday.
Iraq had been exporting around 1.8 million barrels per day from two offshore Gulf terminals before the sabotage on the smaller of two pipelines supplying them.
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