As Nigeria Oil Industry Crisis Worsens...
Strike: ExxonMobil MD Transferred
FG backs Elf production shutdown
By Mike Oduniyi
The Chairman and Mana-ging Director of Mobil Producing Nigeria, Mr. Mike J. Fry, has been transferred from the country, amid plans by senior employees of the US oil firm to embark on industrial action to press demand for wage increase.
The Texas-based ExxonMobil Corporation, the parent company of Mobil Producing, has named one John Chaplin, as his successor.
The workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have served the management, a 21-day ultimatum to meet their demands or face strike, which will lead to shutdown of oil production.
The Federal Government has, however, backed the decision of the management of French firm, Elf Petroleum Nigeria Limited (EPNL) to shut down its entire crude oil production due to safety concerns.
Though no official reason was immediately available for the transfer of Fry who had occupied the post of Chairman of ExxonMobil companies in Nigeria since 2001, THISDAY checks revealed that it was might not be unconnected with the looming industrial crisis in the company.
PENGASSAN had persistently demanded for the recall of Fry over alleged anti-labour policies. Union officials said yesterday that the workers were not favourably disposed to entering into negotiations with the former MD.
The workers also demanded improved welfare package, a major review in employee compensation, benefits and a halt to the influx of expatriates which they claimed had inflated the company's operating expenditure from below $2 a barrel to $2.7 per barrel within two years.
Mobil Producing is Nigeria's second biggest crude oil producing company after Shell, with output of about 600,000 barrels per day (bpd), including condensates.
A strike by the workers will heighten the crisis that has hit the Nigerian upstream oil sector, following the Elf Petroleum crisis that has cut Nigeria's crude output by 235,000 bpd.
THISDAY checks revealed that negotiations between the workers and Mobil management, which started on Monday when the PENGASSAN served the strike notice, remained deadlocked.
"While progress has been made on several items, both parties are yet to agree a common ground on others," a union source said, adding that the situation may remain the same until the new chief executive arrives.
A statement issued and signed by Mobil Executive Director, External Relations, Mr. Udom Inoyo, said the union had issued a work-to-rule ultimatum, "following disagreements over some of the issues under negotiation."
"Mobil Producing Nigeria today confirms that management has been engaged in collective bargaining with the in-house labour union.
"Management restates its belief in dialogue as the most logical mechanism for resolving outstanding issues. Meanwhile, discussions are ongoing and we hope for an accelerated resolution," Inoyo said.
He added that oil production was not affected by the development.
But production shut down by Elf Petroleum entered its seventh day today, resulting in a total loss of 1.65 million barrels of oil and 1.3 billion cubic feet of gas. Total revenue losses amount to about $100 million.
Elf, the Nigerian subsidiary of France's Total, said yesterday that it stopped production on its oil and gas fields since last Friday due to "a degraded safety situation caused by industrial relations problems that increased the risk of normal production."
While stating that it takes the issues of safety with utmost seriousness, Elf said it had already informed the relevant authorities of its decision to close operations.
THISDAY reported yesterday that the protest by Elf senior employees against the management decision not to appoint Nigerians into senior positions, triggered the crisis in the company leading to the shut down in operations.
A senior official of the Department of Petroleum Resources (DPR) confirmed yesterday that the department received the notice of the closure from Elf.
"There is nothing we could do since the issue bothered on safety of lives and facilities. They are therefore obliged to shut down operations once they are convinced it was not safe to continue operation," the official said.
The NNPC, which owns 60 percent of the oil and gas production from Elf fields, was yet to react to the development.
Fears of a large scale reduction in oil output from Nigeria, the Organisation of Petroleum Exporting Countries (OPEC) sixth largest producer, has in part, been fueling the upswing in oil prices in the international market.
Prices rose near $40 per barrel yesterday, with the Light sweet crude closing at $39.45 a barrel as traders said the cut in Nigeria's crude output was a big factor.
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