US embassy cable - 03LAGOS1899

C O N F I D E N T I A L LAGOS 001899 
 
SIPDIS 
 
 
LONDON FOR GURNEY, PARIS FOR NEARY 
DOE FOR CAROLYN GAY AND GEORGE PERSON 
USDOL WASDC FOR ROBERT YOUNG PRIORITY 
 
 
E.O. 12958: DECL: 09/09/2013 
TAGS: ELAB, EPET, KDEM, NI, PGOV, PREL 
SUBJECT: NIGERIA:  UNIONS MAY EXPAND WORK ACTIONS OVER FEAR 
 
OF JOB LOSS IN THE OIL INDUSTRY 
 
 
 1.  Leaders from the National Union of Petroleum and Gas 
Workers (NUPENG) and the Petroleum and Natural Gas Senior 
Staff Association of Nigeria (PENGASSAN) are meeting in Benin 
City to discuss cooperative action amid reports that the 
Nigerian National Petroleum Corporation (NNPC), 
ChevronTexaco, and Shell plan to reorganize their respective 
operations.  Workers fear the reorganizations will lead to 
substantial layoffs and reduce promotion prospects for 
Nigerian employees. 
 
 
2.  Through its "Exploration and Production Globalization 
Project" Shell has already begun restructuring to promote 
greater efficiency.  This has led to an on-going lockout of 
offices by its white-collar union employees in Lagos, Port 
Harcourt, and Warri.  Production has not been affected. 
While the NNPC has confirmed its federally mandated plans to 
reorganize, it contends that there are no plans to layoff 
workers.  Union leaders, however, allege that NNPC plans to 
layoff approximately 2000 employees. 
 
 
3. ChevronTexaco is reportedly meeting with PENGASSAN and 
NUPENG representatives to ensure that the strike at Shell 
does not spread to ChevronTexaco workers, who have already 
called on the company's management to review its 
restructuring plans or face industrial action.  Although 
Chevron has not officially announced plans to reorganize, 
sources within the company said privately that they are 
reviewing possible actions to streamline their operation and 
increase efficiency. 
 
 
4.  COMMENT: Averting a widespread strike may be difficult 
given the seemingly hard-line positions of the major players. 
  In addition to the concerns about massive layoffs, the 
Nigeria Labor Congress (NLC) last week warned the GON that it 
would not tolerate another increase in the price of petroleum 
products, which President Obasanjo has publicly suggested is 
forthcoming. A significant hike in government-set fuel prices 
resulted in an eight-day nationwide strike in late June and 
early July.  Ultimately, the GON relented and reduced the 
amount of the fuel price increase. Obasanjo is now hinting at 
recouping the amount cut back earlier, as refined petroleum 
products are still under-priced.  Increased tensions were 
evident when a scheduled tour of Shell facilities in the Port 
Harcourt and Warri areas for Lagos diplomats was suddenly 
canceled  last week.  Shell's Managing Director of External 
Affairs confirmed to EconOff that Shell is in the process of 
"downsizing" and considered the situation at its facilities 
too volatile to continue with the planned tour, although 
violent ethnic clashes in Warri recently would also have 
given Shell reason to cancel VIP tours there.  END COMMENT. 
HINSON-JONES