US embassy cable - 03LAGOS332

C O N F I D E N T I A L LAGOS 000332 
 
SIPDIS 
 
 
E.O. 12958: DECL: 02/13/2013 
TAGS: ELAB, ENRG, EPET, EFIN, PGOV, NI 
SUBJECT: NIGERIA: PETROLEUM INDUSTRY REGULATORY BODY 
EMPLOYEES PLAN STRIKE ON FEBRUARY 14 
 
 
 1.(U)  After issuing a 14-day ultimatum on February 1, 2003 
to the GON, Petroleum and Natural Gas Senior Staff 
Association of Nigeria (PENGASSAN) announced plans for a 
nationwide strike beginning February 14 by its members within 
the Department of Petroleum Resources (DPR), Nigeria's oil 
and gas industry regulatory body.  According to PENGASSAN, 
the strike was called in response to the GON's refusal to 
allow the DPR to operate as an autonomous agency.  The strike 
by the PENGASSAN DPR employees is scheduled to begin 
off-shore and may take on a wider dimension if demands are 
not met within the first few days. 
 
 
2.(U)  DPR is responsible for reviewing oil licenses, 
measuring volume and maintaining quality control, and 
authorizing crude oil exports.  Since 1991, DPR employees 
have rejected efforts by the GON to integrate the department 
into the federal government because DPR salaries are higher 
and benefits are better than those of federal workers.  Four 
years ago, the National Assembly approved a bill to ensure 
DPR's autonomy; however, the Obasanjo administration has not 
approved the bill. 
 
 
3.(U) Econoff spoke with Mac A. Ofurhie, Director, Petroleum 
Resources at DPR on February 13 who stated that the parties 
"are trying to sort everything out in dialogue" to avert a 
strike.  Despite the role of DPR in authorizing crude oil 
exports, Ofurhie said there will be no problem with product 
movement and that "we do not have to worry." 
 
 
4.(C) LabOff contacted U.S. oil company managing directors to 
discus the reports of a pending strike.  They were unawre 
of it.  One executive opined that a strike woud have no 
short-term effect on production since ost storage tank are 
currently empty; the compaies can continue to extract oil 
for at least tendays before reaching storage capacity.  He 
addedthat as companies move closer to storage capacity, he 
GON will likely intervene to authorize crude oil exports by 
Nigeria. He warned the USG to be cautious in its discussions 
with PENGASSAN and the DPR because they may use U.S. concerns 
as leverage to intensify their industrial action.  Our source 
added that although it is unlikely that the PENGASSAN 
representatives working within the oil companies will join 
the strike, they plan to meet this Friday to assess the level 
of their interests that might be involved in the DPR dispute. 
 
 
5.(C)  Comment. Officials of the National Union of Petroleum 
and Natural Gas Employees (NUPENG) have told us that it has 
no plans to get involved in the proposed strike. While 
PENGASSAN endorses the idea of a strike, except for the small 
group of DPR employees, the other members of PENGASSAN have 
no plans to strike. Although the oil companies we contacted 
believe the dispute will not affect production in the 
short-term, a "worse case scenario" involving a prolonged 
work stoppage could slow the movement of Nigeria's crude oil 
exports. End comment. 
HINSON-JONES