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Analysis: Strike worries roil Nigeria oil

disclaimer: image is for illustration purposes only
by Carmen Gentile

Strike talks continue in Nigeria as a potential labor walkout threatens to cripple a petroleum sector that has already experienced its share of setbacks due to ongoing militant violence.

While government officials and leaders from the country's largest oil union, PENGASSAN, met Wednesday, concerns are growing that petroleum workers have already decided to walk off the job.

Some Nigerian media outlets, citing unnamed sources, said that union workers aggrieved with ExxonMobil would walk off the job as soon as Thursday if their demands were not met. PENGASSAN threatened to walk off the job in protest of ExxonMobil's recent decision to fire 100 union workers.

ExxonMobil officials have since denied any wrongdoing, saying those employees were given generous compensation packages during the current round of restructuring.

Grievances with oil companies operating in the petroleum-rich Niger Delta are not uncommon, said Rolake Akinola, a senior analyst for West Africa at the London-based consulting firm Control Risks.

"These kind of strike threats are a sort of trend (in the Niger Delta)," Akinola told United Press International Wednesday. "That's the cycle we've seen in the oil industry."

And while some consider an impending strike a harbinger of even more difficult times, Akinola disagrees, surmising there is sufficient non-union labor to keep production online, at least for the short term.

She noted that since 1999 the handful of strikes by oil workers in the delta did not diminish production by more than 5 percent for the durations of the walkouts.

With PENGASSEN threatening to pull the largest union workforce, officials in Lagos might be more inclined to hurry labor talks along to avoid another strike.

"If the government saw there was a big strike looming, I'm sure they would move through negotiations," she said.

Akinola said the production shortfalls caused by a potential strike remained insignificant compared with the ongoing violence attributed to gangs and militant groups in the delta.

Producing just over 2 million barrels a day, Nigeria's oil sector is experiencing a 20-percent shortfall from just a few years prior, before widespread militants began stepping up attacks on foreign oil installations and kidnapping workers.

Militants contend that the Nigerian government, along with the foreign oil companies operating in the delta, have benefited enormously over the years from the sale of the nation's oil and gas reserves, though they have done little to help the residents of the region who live in abject poverty.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms.

ExxonMobil is not the only foreign firm in Nigeria to experience labor difficulties.

Earlier this month the International Federation of Chemical, Energy, Mine and General Workers' Unions accused oil giant Mobil Oil Nigeria Plc. of unfair business practices and ill treatment of local union laborers.

According to Nigerian labor officials, Mobil in Nigeria fired those union leaders seeking a collective bargaining agreement for their workers.

"Mobil Oil Nigeria has betrayed our trust," said PENGASSAN General Secretary Bayo Olowoshile.

"These recent actions are premeditated attempts to victimize and harass union officers, frustrate legal justice, and they amount to a serious breach of our existing labor agreement, national industrial law, and global labor standards."

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Analysis: Oil tax upped in Venezuela
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