Nigerian oil workers down tools over sale of OML 42 - CNBC Africa

Nigerian oil workers down tools over sale of OML 42

Western Africa

by Thabile Manala 0

OML 42 sale causes Nigerian oil workers to shut down official business and activities at the headquarters of the corporation. PHOTO: Getty

OML 42 sale causes Nigerian oil workers to shut down official business and activities at the headquarters of the corporation.

These employees are demanding the reversal of the transfer to the Nigerian Petroleum Development Company (NPDC). They are against the operatorship of OML 42 by Shoreline Group and Neconde Energy Ltd.

Emmanuel Ojugbana, the spokesman for white-collar oil union Pengassan, told Reuters on Tuesday, "the shut down has not been done yet," but that they would take action if the government had not met with them by the end of the week.

According to CEO of Shoreline Group, Kola Karim, “There was never any sale of OML, the true position is very simple… NPDC, as the operating arm of NNPC, had some assets novated to them to take on the operations about three years ago."

(READ MORE: Buhari's Nigeria oil policy to focus on reform first, taxes last)

“Benchmarking that to what is happening today, those assets have not been operated efficiently nor does NPDC have the required funding to make sure these assets are performing."

Karim argues that the unions were aware that assets which belong 100 per cent to NPDC, were not being adequately looked after therefore, why was the focus of their strike against assets divested to Shoreline.

He said that a company like Shoreline had the required technical ability and financial capacity to produce royalties and revenues for the government even in the face of dropping oil prices. However, it is “shocking” that unions do not want that.

According to reports, the Trade Union Congress of Nigeria has been pleading with the government to stop the continued scarcity of petroleum products.

TUC further advised the government to take concrete steps on the issue of local refining to put a stop to the problem of importation of petroleum products and payment of subsidy.

With the current decline in the oil price and Nigeria’s debt woes, Karim said that the government stands to gain more from this.

“Government needs to step in and see the reality,” emphasised Karim.

He cited an example of SEPLAT Petroleum Development Company.

“When picked up, the asset production was less than 15 000 barrels a day. With SEPLAT's technical positioning and financial capacity this asset is creating over 70 000 barrels a day.”

There seems to be a mismatch in the opportunities at hand and Nigeria being able to exploit the assets in building its cash reserves.

Shoreline has been closed down for days now and according to Karim the government has no choice because, “The domestic gas obligation is not being met which in turn tells you the power situation is going to get worse in parts of Nigeria”.

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