Labour unions do more harm than good for oil sector —Obijackson boss

The Chairman of Obijackson Group, and an indigenous oil and gas conglomerate, Dr Ernest Azudialu, has stated that labour unions do more harm than good for the oil and gas sector. He however advised them to rather encourage attraction and protection of investments by local and international investors, rather than frustrating them.

He stated this recently during an interaction with Energy reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company.

PENGASSAN picketed the firm when its members in Neconde Energy Limited, the exploration and production (E&P) arm of the Obijackson Group, demanded for transfer benefits and upward review of severance benefits to match those of international oil companies (IOCs) such as Shell and ExxonMobil, following the relocation of the head office of Neconde to Warri from Lagos.

Neconde is one of the 12 subsidiaries in the Group and it is the operator of the oil mining lease (OML) 42 located in Delta State and to make the office and workers to be close to the operational area, the head office of the company was moved to Warri, which generated the demands of Neconde workers.

Azudialu urged the labour to consider firms and the prevailing challenges in the sector and the economy.

According to him, “the management of Neconde despite the myriad of challenges it faced, ensured the workers’ salaries and benefits were paid, therefore, it would be unfair to stifle private firms that borrowed money from banks to create jobs for Nigeria and force them out of business.

“We battled for the operationship of OML 42 with our partner, the Nigerian Petroleum Development Company (NPDC), an arm of Nigerian National Petroleum Corporation (NNPC). Since we bought Shell’s stakes in the oil field in 2012, the battle for operatorship lasted till this year (January 2017). We were confirmed the operator of the asset in March 2017.

“As we were about coming out from operatorship battle, the oil price collapsed. At a point we sold oil at $29 per barrel. Amid fallen oil price, militants blew up the Forcados pipeline, which is the only means of transporting oil from the fields to the terminal on February 13, 2016. With this, the output from the asset estimated to produce 100,000 barrels per day (bpd) at the time of purchase dropped to 15,000bpd and at a point, production dropped to zero.

“We were lifting our own share of the production with barges just to be able to pay our workers. Therefore, it is not fair to use a national union to bring down a private company. It is a wrong signal to any investor whether foreign or indigenous. The government is wooing investors to come to Nigeria and invest in order to create jobs, so labour should not frustrate this initiative.

“As I speak with you, the $558 million we borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its entirety and we took another loan, which is almost the same amount, to repair the facilities and we are paying interests on these loans.”

The Managing Director, Neconde Energy, Frank Edozie, corroborated Azudialu by stressing that despite the challenges the firm faced from the time Shell’s stakes in the oil field was bought in 2012, it had placed the welfare of its staff a priority.

He said at the time of purchase, the potential production from the asset was 100,000 bpd but on completion of the acquisition, production was about 52,000 bpd.

Following the long battle for operatorship, attacks on oil facility especially the Forcados pipeline, production dropped to zero.