*‘We don’t need NUPENG to save oil & gas industry”- PENGASSAN
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has pledged to continue the ongoing strike as the union refused to be intimidated by DSS invitation on Sunday.
The PENGASSAN leadership also stands by its decision to fight on alone without its sister union industry Nigeria Union of Petroleum and Natural Gas Workers (NUPENG).
Comrade Eze Jude Chidinma, Deputy President of PENGASSAN in this interview speaks on issues concerning:
– the ongoing strike action embarked by his union,
– how government’s continuous inaction towards cash call agreements to IOC’s may render the sector moribund soon, and,
– why PENGASSAN seems to be alone in this struggle to rescue the entire oil and gas industry.
Excerpts:
Question: Why is your union in this strike, do you think that it is in the interest of Nigerians to plunge the nation into another economic crisis?
Response: This time I really want to tell you that the strike is actually in the interest of all Nigerians, it is possible that in the past selfish interests might have been pursued but clearly what PENGASSAN is saying is that on the issue of J.V.O funding and cash call agreement, and if you agree with me this is one issue that has been on for so many years, but what is the issue all about?
There is a current arrangement where government through NNPC have an understanding with the International Oil Companies (IOC’s) in a kind of Joint Venture Arrangement, the percentage differs most of them is an average of 60% for government through the NNPC and 40% for the IOC’s.
So it is such that government takes 60% of what comes from the oil and also contribute 60% of the expenditure but the problem is that governments takes their own benefits but are never forthcoming when it comes to the expenditure to finance the projects.
So this has been an issue for so many years, in fact as I talk to you now government owes over 6billion dollars of arrears of cash calls to these IOC’s.
If I should break it down EXXON MOBIL is owed about 1.2billion dollars, SHEVRON, TOTAL, SPDC, each of them is owed an average of about 1billion dollars of cash calls arrears.
Question: Why is all these an issue now since the problem never began today or with this administration?
Response: This issue has been there for so many years but I must tell you that have become more critical today because of the drop in oil prices.
I must tell you that in the past these IOC’s have tried to look for alternative arrangements to cover up the obligations of government since the government totally neglected its own part of the bargain, where NNPC allows them to engage alternative funding arrangements, in an instance where the IOC’s even go borrowing and then recoup later.
But with the sharp drop in oil prices now a typical American company like EXXON MOBIL and the rest of them it is no longer sustainable for them to borrow the margin is dropping heavily.
The investments if you talk about the return on investments it is shrinking for them.
So it is not looking so juicy for them to even go borrowing and when the even borrow the government is not even forth coming with their own part of the bargain.
So this is what has been stifling the industry right now.
But most importantly the way it is going and if it continues like that the oil and gas industry may soon go moribund.
Question: Can you say your union has done enough in interfacing with the relevant ministries of government to avert this perceived public grandstanding?
Response: Of course whenever there is any issue, it is important that we have engagement and then trash it, even as a union we have gone beyond the era of table banging and saying that this must happen.
In the first instance for a while now we have been on that matter, we have taken it up with the Ministry of Labour and the Ministry of Petroleum and in fairness the Hon. Minister himself Dr. Kachikwu has been on the matter.
I remember sometimes in May we had a discussion in Abuja here with the Minister to see how to address the issue.
Although the meeting was somehow skeletal, at the end of the meeting we rescheduled for the 23rd of June which was shortly before the International Labour Organization (ILO) convention.
But, unfortunately, that meeting did not happen, and then it was rescheduled again to the 30th of June where all of us (union executives) that where to attend that meeting where already in Abuja here expecting the meeting only learned from the Ministry of Labour officials that the meeting has been cancelled.
It got to that point we were already here, even most of the branch Chairmen and NEC members of these IOC’s from even other sectors all came around for this meeting but no reasonable direction.
Honestly, at a point we even got across to the Ministry of Labour that we are aware that part of the reason for these cancellations might be due to the absence of Dr. Kachikwu the minister to far away China.
But we can still meet and look at other issues while the critical areas could be left out till the Hon. Minister arrives.