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Oil workers face job loss on IOCs’ divestment

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The Covid-19 pandemic has marked the end of an era for Southeast Asia’s combined oil and gas production.
Some Nigerian oil workers at the local units of International Oil Companies (IOCs) are staring at a bleak future as the planned sale of onshore and shallow waters assets could leave thousands jobless with denied benefits, BusinessDay interview with several oil workers shows.

Oil majors Shell, ExxonMobil, Chevron, and Eni are in a hurry to sell off their troubled Nigerian assets after COVID-19 interfered with their divestment plans in 2019.

These oil majors are keen to offload their onshore and shallow water assets before the end of the Buhari administration, a government they have found favourable to their interests.

Under the APC-led government, oil majors have seen renewed payments on cash call arrears, a lax enforcement of expatriate quotas and even favourable fiscal regime in the new oil law.

However, the Nigerian workforce of these oil companies say their management have perfected plans to pawn them off to local operators who are angling to buy up the assets to work on contract basis with significant haircut to their pay.

Others say the oil majors are laying off their Nigerian workers and denying them benefits that are entitled to them after many years in the employ of these companies.

Since the past three years, ExxonMobil has been firing senior managers and staff on projects they no longer consider attractive.

“For almost a year, we went to work unsure if we would have a job the next day,” said a senior staff member who pleaded anonymity, as the company’s policy prohibits him from speaking with the media.

Before the pandemic, ExxonMobil and some other IOCs offered attractive entitlement packages as they began winding down their operations in Nigeria, but this has since declined.

At Chevron, workers say they are getting some of their benefits though the massive job cuts are ongoing.

Last year, Chevron Nigeria Limited fired over 1,000 of its Nigerian workforce forcing the Labour Unions, Nigerian Union of Petroleum and Natural Gas workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to shut the company’s 220,000 barrel per day operations at the Agbami field.

To resolve the impasse, Chevron was forced to negotiate compensation packages for staff, which eventually restored things to relative normalcy.

Shell and ExxonMobil, sources within the companies say, are taking a page from the same play book. Both companies did not respond to BusinessDay requests for comment.

BusinessDay gathers that these oil companies are on the verge of disengaging thousands of their workforces while also arranging to pawn some of them off to local companies who will employ them as temporary contract staff, therefore denying them the benefits of a full staff.

Some oil and gas industry operators say while it is industry practice to transfer IOC staff working on some projects that were sold to the new owners, it is the responsibility of the IOC to ensure that the staff is equitably treated.

But this has not always been the case. In the previous round of divestment by Shell in 2010, some of the company’s staff were pawned off to Neconde, a subsidiary of Nestoil who bought some oil fields from Shell, but many were rendered redundant in a matter of months. Some who were retained earned far less and on contract basis, a source close to the company said.

To forestall this situation, BusinessDay gathers that the staff union at ExxonMobil has dragged the company to the Industrial Court to protect the right of workers to full benefits if they were disengaged after the divestment.

The erstwhile regulator, the Department of Petroleum Resources, now the Nigerian Upstream Regulatory Commission laid down a procedure by virtue of the Guidelines issued in 1997 and then re-issued in 2005.

Ayodele Oni, energy lawyer and partner at Bloomfield law firm, citing the procedure, says the oil company first had to inform the regulator and obtain consent, once it relates to Nigerian staff.

“The application for termination of their employment must contain their compensation package,” he states.

Once the regulator gives consent, they must implement the decision of the regulator within 10 days (such decision would include payment of compensation). If this process is not followed, the staff to be terminated could petition the regulator, or approach the National Industrial Court if he is not satisfied.

Some of the staff of these companies say the procedure has not been followed.

Paul Osu, head of the public affairs unit of the Nigerian Upstream Regulatory Commission, did not respond to messages seeking confirmation.

Recall that in 2018 some ex-security staff of ExxonMobil also took the company to court to demand their entitlements after they were disengaged. The matter, which went up to the Supreme Court, has since been decided in favour of the former staff and three years after the judgment, ExxonMobil is yet to pay their entitlements.

“We are tired of being patient since 2018, when most of us worked for ExxonMobil all our lives and have no other means of survival. No pension and no gratuity,” they said in a statement issued in March.

IOCs are selling off their onshore and shallow water assets in the Niger Delta. Some local companies including Seplat, Chappel, among others, have expressed interest and negotiations are ongoing.

Shell is leading the pack as it plans to divest all of its operated joint venture (JV) licences held by the Shell Petroleum Development Company (SPDC). This includes a 30 percent interest in 19 oil mining leases (OMLs). Shell is seeking buyers for asset packages in the Eastern, Western and shallow water delta

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