Nigeria Oil Unions Defer Possible Strikes Over Refinery Sales

Dec 31, 2013 7:19 am ET

Dec. 31 (Bloomberg) -- Nigeria’s two main oil unions deferred plans to start an indefinite national strike on Jan. 1 until they meet with government officials to discuss proposals to privatize the nation’s four state-owned oil refineries.

The manager-level Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, with 15,000 members has scheduled talks with petroleum and labor ministry officials for Jan. 7, said its President Babatunde Ogun. The blue-collar National Union of Petroleum and Natural Gas Workers, or Nupeng, hasn’t set a date for discussions, though it will “engage” with government before deciding on strike action, Elijah Okougbo, secretary general for the union representing over 30,000 workers, said today by phone.

“If the government does not back down” Pengassan may call strike action which will start by halting the loading of crude cargoes and a gradual shutdown of oil and gas production, Ogun said by telephone today from Lagos, the commercial capital.

Nigeria, while ranking as Africa’s largest oil producer, relies on fuel imports to meet more than 70 percent of its needs, as its 445,000 barrels a day of refining capacity operates at minimal rates because of poor maintenance and aging equipment. Petroleum Minister Diezani Alison-Madueke said in an interview last month that the government of the continent’s largest oil producer will pursue the plan to begin the sale of the refineries before the end of the first quarter.

The plan to sell the refineries, in Port Harcourt, Warri and Kaduna, is “against the overall national interest and in the interest of a few,” Pengassan and Nupeng said in a Dec. 18 joint statement. The government’s plan will “transfer government monopoly to cartels that will dictate the market,” the unions said.

Poor Performance

A presidential audit of the plants last year recommended their sale, citing inadequate state funding and what it described as “sub-optimal performance.”

The West African nation exchanges 60,000 barrels a day of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Ivory Coast, according to Nigeria National Petroleum Corp.

The government’s privatization plans come as Africa’s richest man, Aliko Dangote, seeks to construct a $9 billion oil refinery, petrochemical and fertilizer complex in Nigeria’s southwest by 2016. Dangote says the plant will reduce Nigerian fuel imports.

--Editors: Stephen Voss, Grant Smith