Nigeria loses N1.3bn daily over oil workers’ strike

Nigeria is currently losing a minimum of $6.676 million, an equivalent of N1.335 billion daily as a result of the strike action embarked upon by workers of the Nigerian Petroleum Development Company, NPDC, over the transfer of operatorship of Oil Mining Leases (OMLs) 40, 42 and 30. Sources in the NPDC told Platts, yesterday, that as a result of the strike, about 100,000 barrels of the company's daily crude oil production is deferred.
Specifically, using the Central Bank of Nigeria's, CBN, estimate of $66.76 per barrel crude oil price, a shut-in of 100,000 barrel per day amounts to a loss in revenue of N$6.676 million, about N1.335 billion to the country. The amount lost in terms of revenue to the country does not include revenue due from gas from the oil fields.
The sources also told Platts that the protesting workers had pulled out of oil fields operated by NPDC except OML 38 due to its strategic importance to the country. "We did not want to shut down OML 38 because of the huge gas supply from the fields in the block to the national power grid," a union official told Platts.
The sources further confirmed the presence of heavily armed military operative around some of the oil wells, stating specifically that the Federal Government had drafted troops to OML 42, which currently produces around 31,000 barrel per day of crude oil. NPDC, the upstream arm of the Nigerian National Petroleum Corporation, NNPC, currently produces around 150,000 barrels per day of crude oil and 700 million cubic feet per day of gas.
The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, branch of the Nigerian Petroleum Development Corporation, NPDC, had on Monday shut down exploration activities in the country over the failure of the Federal Government to reverse the transfer of the operatorship of Oil Mining Lease, OML, 42.
A statement from the JV partners said the shut-in had affected all NPDC operated assets in joint venture with indigenous companies that had applied for operatorship, except Neconde, who, prior to the crisis, had been awarded the operatorship of OML 42, and immediately got the JTF to secure the assets.
Elcrest (OML 40) which is next in line to be awarded operatorship, Shoreline OML 30 and FHN/Afren (OML 26) have now been shut as oil evacuation is hampered from OML 34 which relies on the OML 30 pumping station. The unions had accused the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, of stripping the two oil blocks from NPDC, a subsidiary of NNPC.
The unions are upset that the sale of the assets did not follow due process and would affect the fortunes of the NPDC and its workers. The Federal Government had transferred its average 55 per cent equities in all the eight oil blocks sold by Shell, Total and Eni between 2010 and 2014, to NPDC. The government also appointed NPDC to take over operatorship of the block from Shell.