US embassy cable - 03ABUJA1473

UNCLAS SECTION 01 OF 02 ABUJA 001473 
 
SIPDIS 
 
 
SENSITIVE 
 
 
E.O. 12958: N/A 
TAGS: EPET, ASEC, PGOV, NI, PLAB 
SUBJECT: FOLLOW-UP ON APRIL 2003 TRANSOCEAN HOSTAGE TAKING 
 
 
REF: A. LAGOS 1088 
     B. ABUJA 813 
     C. ABUJA 810 
     D. ABUJA 807 
     E. ABUJA 806 
     F. ABUJA 768 
 
 
1.(SBU) During an early August visit to Port Harcourt, 
Corporate Responsibility Officer (CRO) met with Russel 
Pousson, Manager for Operations of Transocean Sedco Forex, 
the Houston-based oil service company whose four off-shore 
rigs where the target of an April 2003 hostage-taking by 
members of the National Union of Petroleum and Natural Gas 
Workers (NUPENG), Nigeria's union of blue-collar oil and gas 
workers.  That siege, which held 96 expatriate oil workers 
(including 17 AMCITS) hostage for 15 days, ended after 
Ambassador Jeter appealed to President Obasanjo and the 
President of the Nigerian Labor Congress, who interceded with 
NUPENG's national leadership and facilitated a negotiated end 
to the standoff.  (Note: As reftels report, the actions of 
the local Transocean chapter of NUPENG were not condoned by 
NUPENG's national leadership, which led to a division that 
persists through ongoing negotiations with Transocean's 
management. End Note) 
 
 
2.(SBU)  According to Pousson, none of the 350 NUPENG workers 
employed by Transocean has been allowed back on the rigs. 
Non-union laborers obtained from a Nigerian contractor are 
manning the rigs, all of which are in full operation.  88 
NUPENG members were fired in late April for participating in 
the hostage-taking, which Transocean (and the rest of the 
oil/gas community) views as a criminal act.  Their salaries 
have stopped and, according to Pousson, many have come in to 
Transocean's Port Harcourt office to collect their severance 
pay, which is viewed as acceptance of their termination.  The 
remaining 240 or so NUPENG members employed by Transocean are 
sitting at home, collecting base salary -- as required by 
NUPENG's collective bargaining agreement with Transocean -- 
but none of the supplemental allowances such as housing, 
travel, rig premium pay, etc. (Note:  The Nigerian government 
taxes only base salary, therefore the typical compensation 
plan for a Nigerian worker includes myriad supplemental 
allowances that together account for the majority of the 
compensation. End Note) 
 
 
CODE OF CONDUCT SOUGHT 
---------------------- 
 
 
3. (SBU) The Lagos-based Managing Director of Transocean's 
Nigeria operations, Ian Clark, continues meetings with 
NUPENG's national management in an attempt to reach a 
settlement allowing the NUPENG workers back to work on the 
rigs, according to Pousson.  The lack of a settlement, 
however, has not affected the company adversely he, insisted. 
 NUPENG workers will only be allowed back to work when they 
agree to abide by a new "code of conduct" being developed by 
MD Clark and which will cover criminal acts such as the 
hostage-taking.  Even when the code of conduct is accepted, 
NUPENG workers will be phased in gradually and will not be 
allowed in such large groups on individual rigs as existed 
before.  "We learned our lesson," noted Pousson, who 
explained that the NUPENG workers onboard the Transocean rigs 
in April greatly outnumbered the expatriates staff, which was 
overwhelmed. 
 
 
4. (SBU) CRO asked if Transocean was still vulnerable to 
additional work action from NUPENG.  The Operations Manager 
insisted that NUPENG has lost its battle with Transocean and, 
with its Transocean members fired or on effective furlough, 
is now incapable of affecting Transocean operations.  "We 
broke their back," concluded Pousson.  The Transocean 
official noted that the all other operating or oil service 
companies have been watching Transocean's experience with 
NUPENG with great attention and full support for the company. 
 
 
 
 
RIG TRANSPORT ISSUE A RED HERRING? 
---------------------------------- 
 
 
5. (SBU) Pousson noted that the hostage taking started out of 
NUPENG members' anger over Transocean management's decision 
to fire five senior NUPENG members for allegedly defrauding 
Transocean through false expense claims.  The NUPENG workers 
publicly cited their demand for transportation to/from the 
deep-water off-shore rigs via helicopter, as the expatriate 
oil workers are transported, vice the slow supply boats.  The 
Transocean manager stated that this was a weak case on which 
to hang NUPENG's justification for the hostage-taking, noting 
that other companies follow the same practice as it is 
impractical to change large crews (50 or more) via 
helicopters that hold six to eight passengers.  More to the 
point, claimed Pousson, transportation for the change of 
crews is not the responsibility of the oil service company 
(e.g. Transocean) but rather is provided by the Operating 
Company owning the field being drilled or pumped, such as 
Shell, ChevronTexaco or Agip. 
6. (SBU) While refusing to disclose the salaries paid to 
Transocean's Nigerian workers, Pousson claimed that 
Transocean's compensation is "70 percent" higher than the 
industry average and "30 percent" higher than its next 
closest competitor.  If the high salaries paid to Nigerian 
staff were to "get out" in the public, NUPENG would lose a 
lot of sympathy, opined the Transocean manager. 
 
 
 
 
ROBERTS