How ExxonMobil Causes Nigeria To Lose $35m Daily

Mismanagement by oil giants, ExxonMobil, of the Joint Venture deal with the Nigerian National Petroleum Corporation (NNPC), SaharaReporters has learned, has resulted in production losses amounting to 600,000 barrels per day, which cost Nigeria $35million daily. Information available to SaharaReporters revealed that the mismanagement is symptomized by the high-handedness of Mr. Nolan O’Neal, Managing Director of ExxonMobil.

This, the website was informed, has resulted in a shut in at Mobil production facilities, imposing the loss of 300,000 barrels of JV crude per day, 200,000 of Deepwater cruder per day, 25,000 barrels of condensate per day and 43,000 cubic units of Liquefied Natural Gas daily. The production shut in at Mobil facilities was caused by the decision of the Mobil management to transfer previously nationalized jobs to expatriates.

Company sources told SaharaReporters that in 2015, the Mobil management, headed by Mr. O’Neal, met with the company’s chapter of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to discuss the modality for reducing operational costs due to the stifling business environment. At the meeting the association supported the management’s proposal to trim the workforce by laying off 142 employees.

But, again, in 2016, said sources, the management approached PENGASSAN and tabled a proposal to lay off more staff. PENGASSAN, disclosed sources, argued that the management had no justification to consider another cull, given that over 50 expatriates were brought into the country as replacements for the Nigerians sacked the previous year.

“Available data show that the cost of maintaining these expatriates is higher than the cost of 142 separated employees and cannot be justified by management’s claim of lowering operating expenses,” said a source.

Another source disclosed that the action of the management was part of Mr. O’Neal’s grand scheme to replace Nigerians with expatriates in ExxonMobil’s affiliates in the country. According to the source Nigerian management staff sacked in 2015 and replaced by expatriates in 2016 included Messrs. Jide Ayo Vaughan (Executive Director), Emeka Awobokun (General Manager, Logistics) and Ayo Olubiyi (General Manager, Security). In addition, Mobil sacked 11 Master Mariners and replaced them with unqualified expatriates. The management also brought in 16 expatriates to replace three persons sacked from the security department.

Based on these figures, explained the source, the company’s chapter of PENGASSAN rejected the request of the management to downsize in November 2016. But while discussions were still in progress, explained sources, the management adjourned the meeting indefinitely without any agreement with the local PENGASSAN chapter.

What followed next was that the management started issuing sack letters to staff on 14 December 2016. Many of them, said to have served the company for between 10 and 27 years, got the information that they had been sacked through their spouses and via text messages. Those informed through letters were said to have been marched out of the company headquarters like criminals.

“The action of the management was in flagrant disregard for the collective bargaining agreement (CBA),” a source told SaharaReporters, adding that the action also violated Nigerian laws.

The source maintained that clauses 2 (a) and 3 (f) of the CBA were breached by the management. The former states: “The company confers full recognition of the association as the sole collective bargaining agent on matters affecting the conditions of employment of all the company’s senior staff, who are financial members of the association (as stipulated in the applicable laws) and with classification levels CL17 through CL 25.”

Section 3 (f) prescribes that in the event of major changes affecting the welfare and conditions of service of PENGASSAN members, the association must be informed and “both parties shall agree on the proposed changes before implementation”.

Sources explained that the action of the management amounted to a violation of the relevant clauses, as there was no agreement with PENGASSAN regarding the implementation of either a special severance package or redundancy.

Insiders equally argued that even if redundancy was discussed with the association, management’s implementation of it amounted to a violation of Clause 20 Section 1 (c) of the Nigerian Labour Act.

The section states: “The employer shall use his best endeavors to negotiate redundancy payments to any discharged workers, who are not protected by regulations made under sub-section (2) of this section.”

Sources told SaharaReporters that the discussion held between the management and the association was on special separation package, not redundancy. Company insiders disclosed that media reports of exaggerated sums paid as redundancy allowances were planted by the company to mislead the public, as no impacted staff has been paid anything close to the reported sums.

“The management is being economical with the truth on implementing redundancy,” said a source.

Documents available to this website also show that the management’s action was in breach of Clauses 28 (1) and 31 (1) of the Nigerian Oil and Gas Content (NOGIC) Act 2010.

According to the former, “subject to section 10 (1) (b) of this Act, Nigerians shall be given the first consideration for employment and training in any project executed by any operator or project promoter in the Nigerian oil and gas industry”. The latter states: “For each of its operations, the operator shall submit to the Board a succession plan for any position not held by Nigerians and the plan shall provide for Nigerians to understudy each incumbent expatriate for a maximum period of four years and at the end of the four-year period, the position shall become Nigerianized.”

Company sources maintained that the Mobil management has scant regard for Nigerian authorities. According to them, the Minister of State for Petroleum Resources, Mr. Ibe Kachiukwu, appealed that the sack letters issued be withdrawn for both parties to return to the negotiation table. However, the Mobil Managing Director was said to have blatantly refused.

( SaharaReporters)