NIGERIA: DEPARTMENT OF PETROLEUM RESOURCES

UNCLAS LAGOS 000344

SIPDIS


E.O. 12598: N/A
TAGS: ELAB ENRG EPET EFIN PGOV NI
SUBJECT: NIGERIA: DEPARTMENT OF PETROLEUM RESOURCES
EMPLOYEES BEGIN STRIKE

REF: LAGOS 000332



1. On Saturday, February 15, employees from the Department
of Petroleum Resources (DPR) went on strike to contest
unpaid salaries and benefits and protest the GON's refusal
to grant DPR autonomy. DPR is the agency that supervises
tanker loadings and authorizes movement of crude oil at
Nigeria's eight oil exports terminals. Sina Luwoye,
President of the Petroleum and Natural Gas Senior Staff
Association of Nigeria sent a letter to DPR management over
the weekend warning that if demands are not met by Tuesday,
February 18, PENGASSAN would order all of its members to
join the strike. Post contacted PENGASSAN's Deputy General
Secretary Bayo Olowosile this morning. He confirmed

SIPDIS
Luwoye's warning, however, he added that PENGASSAN's
Executive Council must make the final decision regarding an
association-wide national strike.

2. A DPR Spokeswoman told journalists over the weekend that
the GON has unfolded a contingency plan to counter the
strike. She said DPR plans to send its management staff to
depots, terminals and jetties to ensure that operations are
not disrupted. Replacement staff will be used to sustain
operations at five export terminals operated by Exxon Mobil,
ChevronTexaco, Royal Dutch/Shell, Italy's Agip, and CVX
Research. Econoff spoke with a US oil representative this
morning, who reported that as of now, it is unclear what
impact this strike will have on exports. If DPR managers
actually deploy in the field "with the keys to the valves,"
as reported, the impact may be minimal. Even if DPR
managers cannot keep oil moving out to tankers at current
rates, crude will likely continue to be lifted, processed
and sent to each company's onshore storage facilities under
normal routine. The representative stated his company
usually loads two tankers per week for export, and if any
one company has difficulties loading, others will likely be
given the opportunity to increase their share of outbound
production. Exports will likely be affected if striking
workers can create a uniform impact at all export facilities
simultaneously. The representative also noted that world
oil prices may be affected simply by news of the strike,
which has been covered by CNN and the New York Times, even
if export production from Nigeria is not actually
diminished.

3. Comment: The strike has already created crowds at local
gas stations amid public concerns of a possible fuel
shortage. Several gas stations in Abuja are also limiting
the sale of fuel to the public due to fears of confrontation
with PENGASSAN. If PENGASSAN orders a nationwide work
stoppage, the other oil and gas union, the National Union of
Petroleum and Natural Gas Workers (NUPENG) will probably
offer passive support. Under an existing pact between
NUPENG and PENGASSAN, a single body called NUPENGASSAN was
established to promote greater cooperation between the two
unions, particularly in disputes involving industrial
action. Although NUPENG has not issued a statement on the
matter, a joint NUPENG-PENGASSAN strike is possible but
unlikely. Regardless of what NUPENG decides, since the work
performed by union members from both sides is interrelated,
a prolonged PENGASSAN strike will significantly diminish
overall productivity. We will know by tomorrow whether the
DPR strike will spread to the industry at large.
Hinson-Jones