Nigeria Oil Unions Set for Government Talks Amid Strike

Nigeria’s two oil unions are set to meet with government officials for talks today as an indefinite strike aimed at curbing local fuel supply and exports entered a third day in Africa’s biggest crude producer.

The impact of the strike has been restricted to domestic fuel supply with oil lifting and export terminal operations unaffected at the moment, Francis Johnson, president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, said by phone yesterday from Lagos, the commercial capital. Union leaders will hold talks with the authorities today in Abuja, the capital, he said.

Any reduction in pumping would coincide with a collapse in the price of Nigeria’s biggest source of government revenue. Brent crude oil plunged about 46 percent this year. Nigerian policy makers devalued the local currency last month and is proposing spending cuts for next year as it heads toward elections in February.

“Oil unions have capitalized on the highly politicized circumstances ahead of elections,” Gareth Brickman and Catherine Bennett, Africa analysts at Johannesburg-based ETM Analytics, said by e-mail yesterday. “While such strikes in the past have not had major impacts on production, the union are talking up disrupting export flows, which would only exacerbate the dollar deficit prevailing in the exchange rate.”

Ohi Alegbe, an Abuja-based spokesman for the Nigerian National Petroleum Corp. and the Oil Ministry, declined to comment on exports. Pengassan previously said the strike may curb exports. Domestic supply won’t be affected, with about 17 fuel tankers waiting to unload at the port of Lagos, NNPC’s Alegbe said in a Dec. 15 e-mail.

Protest Government

Brent, the global benchmark, fell as much 91 cents, or 1.5 percent, to $59.10 a barrel on the London-based ICE Futures Europe exchange before trading hands at $59.44 at 12:04 p.m. Singapore time.

The action involves both Pengassan, as the managerial union is known, and the Nigerian Union of Petroleum and Natural Gas Workers, or Nupeng, its affiliate for manual workers. Nigeria’s crude oil output declined 3.2 percent when they last went on strike in September, data compiled by Bloomberg show. Nigeria pumped 2.3 million barrels of crude oil a day last year, 26 percent of Africa’s total output, according to BP Plc estimates.

At least 80 percent of Nigeria’s crude is pumped by Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA in joint ventures with the state-owned NNPC.

Petroleum Bill

Shell is “aware of the strike and monitoring the situation,” Precious Okolobo, a Lagos-based spokesman, said by phone yesterday. Officials at Exxon Mobil, Chevron, Total and Eni didn’t immediately reply phone calls and e-mails seeking comments.

The action is to protest government failure to fix refineries, cut gasoline prices in line with the slump in crude, and also to press for the passage of a new oil law, according to an e-mailed statement from Pengassan.

The two unions want the authorities to expedite passage of the petroleum industry bill, curtail crude theft and pipeline sabotage, and address what they say are unfair labor practices by some energy producers, according to its statement.

The West African nation relies on crude for about 70 percent of government revenue and 95 percent of foreign exchange income.

To contact the reporters on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net; Goddy Ikeh in Lagos at gikeh@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net Chris Kay, Dulue Mbachu