US embassy cable - 03LAGOS344

UNCLAS LAGOS 000344 
 
SIPDIS 
 
 
E.O. 12598: N/A 
TAGS: ELAB, ENRG, EPET, EFIN, PGOV, NI 
SUBJECT: NIGERIA: DEPARTMENT OF PETROLEUM RESOURCES 
EMPLOYEES BEGIN STRIKE 
 
REF: LAGOS 000332 
 
 
1.  On Saturday, February 15, employees from the Department 
of Petroleum Resources (DPR) went on strike to contest 
unpaid salaries and benefits and protest the GON's refusal 
to grant DPR autonomy.  DPR is the agency that supervises 
tanker loadings and authorizes movement of crude oil at 
Nigeria's eight oil exports terminals. Sina Luwoye, 
President of the Petroleum and Natural Gas Senior Staff 
Association of Nigeria sent a letter to DPR management over 
the weekend warning that if demands are not met by Tuesday, 
February 18, PENGASSAN would order all of its members to 
join the strike. Post contacted PENGASSAN's Deputy General 
Secretary Bayo Olowosile this morning.  He confirmed 
 
SIPDIS 
Luwoye's warning, however, he added that PENGASSAN's 
Executive Council must make the final decision regarding an 
association-wide national strike. 
2.  A DPR Spokeswoman told journalists over the weekend that 
the GON has unfolded a contingency plan to counter the 
strike.  She said DPR plans to send its management staff to 
depots, terminals and jetties to ensure that operations are 
not disrupted.  Replacement staff will be used to sustain 
operations at five export terminals operated by Exxon Mobil, 
ChevronTexaco, Royal Dutch/Shell, Italy's Agip, and CVX 
Research.  Econoff spoke with a US oil representative this 
morning, who reported that as of now, it is unclear what 
impact this strike will have on exports.  If DPR managers 
actually deploy in the field "with the keys to the valves," 
as reported, the impact may be minimal.  Even if DPR 
managers cannot keep oil moving out to tankers at current 
rates, crude will likely continue to be lifted, processed 
and sent to each company's onshore storage facilities under 
normal routine.  The representative stated his company 
usually loads two tankers per week for export, and if any 
one company has difficulties loading, others will likely be 
given the opportunity to increase their share of outbound 
production.  Exports will likely be affected if striking 
workers can create a uniform impact at all export facilities 
simultaneously.  The representative also noted that world 
oil prices may be affected simply by news of the strike, 
which has been covered by CNN and the New York Times, even 
if export production from Nigeria is not actually 
diminished. 
3.  Comment: The strike has already created crowds at local 
gas stations amid public concerns of a possible fuel 
shortage.  Several gas stations in Abuja are also limiting 
the sale of fuel to the public due to fears of confrontation 
with PENGASSAN.  If PENGASSAN orders a nationwide work 
stoppage, the other oil and gas union, the National Union of 
Petroleum and Natural Gas Workers (NUPENG) will probably 
offer passive support.  Under an existing pact between 
NUPENG and PENGASSAN, a single body called NUPENGASSAN was 
established to promote greater cooperation between the two 
unions, particularly in disputes involving industrial 
action.  Although NUPENG has not issued a statement on the 
matter, a joint NUPENG-PENGASSAN strike is possible but 
unlikely.  Regardless of what NUPENG decides, since the work 
performed by union members from both sides is interrelated, 
a prolonged PENGASSAN strike will significantly diminish 
overall productivity.  We will know by tomorrow whether the 
DPR strike will spread to the industry at large. 
Hinson-Jones