Chevron workers on strike over rationalisation, threaten total shut down

The oil sector may witness another big shock, following the industrial action embarked upon by the employees of oil giants, Chevron Nigeria. The embattled workers of the multinational oil company are up in arms against the management of the company over a number of issues, including welfare and proposed disengagement of workers slated for August this year.

But the apprehensive workers fear that the template for the proposed rationalisation may not be in tune with the labour’s collective agreement. They have, therefore, threatened total shut down of operation, which, if not properly handled by the management, could send a wrong signal to the global oil market.

The Daily Times gathered that the strike action, which has since Thursday, taken effect at the premises of the oil company, has begun impacting on the operations of the firm, as the workers, under the aegis of Petroleum Senior Staff Association of Nigeria, PENGASSAN, have abandoned their desks.

A source said that, “The most important part of their grievances is a staff rationalisation exercise planned for August”. The local PENGASSAN is aggrieved that the management of Chevron has not engaged them up to this point, and has raised concerns that the proposed lay-offs are a sharp departure from previous lay-offs, which have been voluntary. The union has said that it expects the management to come to the dialogue table, a demand which if not met, will force a total shutdown of Chevron’s production.”

Observers say that beyond the strike action, the shutdown could have far reaching consequences on Nigeria, a country currently bogged down by recession, huge debt, security challenges and revenue shortfall .

Analysts say that some of the immediate and long- term effects of the challenge could be a negative l impact on the country’s production figures which the NNPC puts at 2.2mbpd. Chevron produces 500kbpd, the Agbami production facility alone does about 250kpbd.

According to SBM ,an intelligence research firm, ‘there is the potential for the national PENGASSAN to join in in solidarity, as we saw in the Mobil incident. This could quickly affect gas supply to the Nigerian Gas Company, and have an impact on power.’

In the medium term, the firm says, “such a shutdown could hit the N7.44 bn 2017 budget”, which has already been signed into law by Acting President, Profesor Yemi Osinbajo.

Already, Brent Crude is currently trading at $44.78. Nigeria’s 2017 budget is predicated on $44.50 and 2.2 mbpd. This strike action, and future reactions, need to be watched, observers waned.