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Global Energy Advisory – 22nd June 2018

Global Energy Advisory – 22nd June 2018

Bottlenecks in the Permian are…

Exxon Labor Negotiations Fall Apart, Threaten Nigerian Oil Production

Lagos

Talks between Exxon officials in Nigeria and the fossil fuel sector’s labor union have failed to produce a mutually agreeable solution, according to a labor official who spoke to Bloomberg on Friday.

The meeting broke down, and as of this morning our action has been escalated,” Gbenga Ekundayo of the Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, said over the phone from the capital of Lagos. “Our people in the field have started withdrawing their services, which will automatically translate to production loss. We are pulling out completely.”

The protests began eleven days ago, and their escalating nature prompted the formation of an arbitration panel to resolve the dispute regarding the wrongful termination of 83 unionized workers in December.

Previous protests have had little effect on Nigerian oil production, but Cheta Nwanze at Lagos’ SBM Intelligence, said the union had “now reached a breaking point” and that the demonstrations would begin having an impact on production “in the coming days.”

Earlier this week, it seemed the parties had made progress on resolving the issue, but negotiations broke down as they drafted an agreement.

“We respect the rights of our workforce and will continue to engage with them to resolve this situation, but remain committed to the safety of our personnel and security of our facilities,” Exxon spokesman Todd Spitler said in an emailed statement.

In previous statements, Pengassan has said the group seeks financial compensation for the workers who lost their job.

"We want them to be brought back and if that is not possible we want a proper severance package for them," said Abel Agarin, the union’s leader. Agarin led around 50 protesters in a demonstration in the commercial capital last week, but strikes have occurred in Lagos, Bonny, Akwa Ibom, and Port Harcourt.

By Zainab Calcuttawala for Oilprice.com

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