A Review of the Nigerian Energy Industry

Oil workers give conditions for sale of refineries

Warri-refinery22 December 2013, Lagos – The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas (NUPENG) workers have renewed their threat to shut down the system if the federal government goes ahead with its plan to privatise the refineries.

According to them, selling the refineries without their participation would amount to shaving their heads in their absence.

The oil workers also insisted that the transaction should follow due process to ensure that the most competent investors emerge as the core investors.

The two oil workers unions that spoke in their reaction to the setting up of a steering committee by President Goodluck Jonathan to oversee the process, also told THISDAY yesterday that the Petroleum Industry Bill (PIB) must be passed as a pre-condition for the sale of the refineries.

General Secretary, National Union Petroleum and Natural Gas Workers (NUPENG), Mr. Isaac Aberare, said the union was yet to be officially informed of any stakeholders’ committee set up by the government.

Aberare, who spoke in a telephone conversation with THISDAY, reiterated the union’s decision to embark on a nationwide strike until government rescinds its decision to privatise the refineries.

He hinted that NUPENG and its sister union- the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) would soon meet to fix a date for the execution of the planned industrial action.

“Government must engage labour unions in the sector to discuss the model for the planned privatisation. We were not informed about any committee being set up. If government sets up a committee without involving the labour then, they have not met our demand.

“At the intervention meeting with the Minister of Power shortly after our protest, we emphasised that government should retract the plan to privatise the refineries and engage the unions but up till now, they have not met nor informed us of any meeting.

“The leadership of NUPENG and the PENGASSAN will soon meet and take a decision on the execution of our planned protest. It is at that meeting that a date will be fixed for our protest,” Aberare said.

Efforts to reach PENGASSAN President and Secretary, Mr. Babatunde Ogun and Bayo Olowoshile, respectively, were unsuccessful as their numbers were not available.
The two unions had officially kicked against the planned privatisation of the four refineries since the pronouncement was made few weeks ago.

Meanwhile, Western Zonal Chairman of NUPENG, Alhaji Tokunbo Korodo, in a separate interview told THISDAY that the unions were opposed to unilateral privatisation, without putting into consideration the position of other stakeholders.
“There is no way privatisation will not affect the welfare of the workers.
PENGASSAN and NUPENG have made their position known. The government must explain to us why it should privatise. We want to be actively involved. If they go ahead without actively involving us, we will shut down the system,” he said.
One of the national officers of PENGASSAN told THISDAY that privatising the refineries without the active involvement of the workers in the process would amount to shaving someone’s head in his absence.

“It is like shaving our heads in our absence and we have vowed to resist it. Due process must be followed,” he said.

The workers also stated that the PIB should be passed to address the problems of the refineries.

However, some other stakeholders have faulted the position of the oil workers.
A former national officer of one of the unions told THISDAY that the workers should pursue national interest instead of selfish interest.

“What we need is something that is pro-Nigeria. Are the workers saying that the way the NNPC is structured is okay? Are they saying that the refineries are working? When provision for the Incorporated Joint Ventures (IJVs) was made in the PIB, the International Oil Companies (IOCs) used PENGASSAN and NUPENG to oppose it. The initial plan was to have IJVs so that the government would hands off but for reasons known to the unions, they forced the government to drop the IJV,” he said.

The Chairman and Chief Executive Officer of ELSHCON Nigeria Limited, Dr. Emi Membere-Otaji, also stated that privatisation was the only way forward for the refineries.

Membere-Otaji, whose company is an Engineering, Procurement, Construction and Installation (EPCI) contractor, as well as marine services provider, told THISDAY at the weekend that the workers should insist that due process be followed rather than opposing the process.

“When the administration of former President Olusegun Obasanjo privatised the refineries, the workers protested until the late President Musa Yar’Adua cancelled it. The federal government has pumped billions of naira into the refineries since that time but they are not working. So, privatisation is the way forward but due process must be followed. Post-privatisation rules must be followed so that the private investors will not cannibalise the plants,” he said.

The federal government, had on Friday set up a ‘Steering Committee’ to engage all stakeholders in a bid to ensure that due process is followed in the sale of the refineries.

The committee’s terms of reference would be to, among other things, advise the National Council on Privatisation (NCP) on the best way to privatise the refineries in a manner that would enhance the gains of the privatisation programme of the federal government; review the diagnostic reports and recommendations of the transaction advisors and make recommendations to the NCP, propose modalities and make recommendations to NCP on labour matters to ensure the successful privatisation of the refineries.

The steering committee is also to “generally oversee the process and make recommendations to NCP for the successful privatisation of the refineries and carry out any other ancillary activities relevant to the attainment of the goals of the Federal Government in the reforms and privatization of the nation’s refineries.”
The initial sale of the Kaduna and Port Harcourt refineries by the administration of President Obasanjo was greeted with public discontent, which forced the administration of the late President Yar’Adua to cancel the deal in July 2007.

Bluestar Oil Services Consortium, owned by multi-billionaire businessmen, Alhaji Aliko Dangote and Mr. Femi Otedola, had staked N92.3 billion (then about $721 million) to get the nod of the Bureau of Public Enterprises (BPE) to take over the refineries.

Bluestar acquired 51 per cent in Port Harcourt Refinery for N71.8 billion ($561 million) and Kaduna Refining and Petrochemicals at N20.5 billion ($160 million).
Dangote Group of Companies and Zenon Petroleum, owned by Otedola formed the consortium, with the Rivers State Government having the minority stake in Port Harcourt Refineries.

– This Day

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