Workers oppose proposed restructuring of Nigeria’s oil industry

Crude oil extraction [Photo credit: Bloomberg]
Crude oil extraction [Photo credit: Bloomberg]

Oil workers on Thursday vowed to oppose plans by the Ministry of Petroleum Resources to restructure the oil and gas industry.

Last week, Reuters published an outline of the plan released by the ministry to restructure operations of the Nigerian National Petroleum Corporation, NNPC, and scrap some select regulatory agencies in the industry.

Although the report criticized the plan as lacking in details, it said the outline contained proposals to overhaul the NNPC, in a bid to modernize and streamline its operations and strip it of the toga of a cesspool of corruption and mismanagement.

The ministry said the oil sector reform, which has stalled for years, due to disagreements among interest groups, was necessary; or the country would risk its oil production capacity falling.

It said key to the plan was the transformation of the NNPC from a “bureaucratic empire, where little work gets done, into an entity functioning like the private sector.”

“The NNPC will be made autonomous from the state. It will relinquish all its policy making and regulatory activities, and it will be treated on an equal basis with private sector operators for projects,” the draft plan said.

“Unless there are additions to reserves and those reserves are brought into production, Nigeria can expect to see absolute declines in production from around 2020,” it added.

But the union of oil workers, PENGASSAN, said although it was not opposed to a wholesome reform in the oil and gas industry, which it described as  “desirable and proper”, it was not advisable to contemplate any such exercise without a buy-in by persons who would be impacted directly or indirectly.

It also said due process was not being followed in the proposed reforms.

“The PENGASSAN wishes to state unequivocally it is not aware of any known channel, other than the National Assembly, with powers to either repeal or enact laws on existing corporations and agencies, duly set up by law,” it noted through its spokesperson, Emmanuel Ojugbana.

“The association will support any initiative aimed at revamping the oil and gas industry just as it will challenge under-development and impoverishment of Nigerians under the guise of restructuring,” he added.

The association said its contributions to the debate on the Petroleum Industry Bill (PIB) currently pending passage by the National Assembly, focused on job security, job creation, transparency in fiscal regime, infrastructural development, promotion of local content, local refining capacity, community development and wealth creation for Nigerians.

Mr. Ojugbana said PENGASSAN was completely in the dark with the proposed industry road map, saying its members would continue to insist on genuine reforms to sanitize the system and regain the confidence of Nigerians.

While assuring of its commitment to service delivery, job security, job creations, diligence and hard work to grow the economy, PENGASSAN urged government to take a second look at its initial observations and clarifications to the passage of the PIB.


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