“Making Nigeria an attractive destination for oil and gas investment will undoubtedly ensure an increasing government take for many years to come and create a great many employment opportunities for a growing population…”
That was the submission of Addax Petroleum in its memorandum to the House of Representatives Joint Committee on Petroleum Industry Bill (PIB), on July 30, 2009 on invitation to present its views to the public hearings and consultative process on the HB. 159 Bill.
The PIB still waiting for passage into law seeks to establish the legal and regulatory reform framework for the Nigerian petroleum industry, and guidelines for the operations of the upstream and downstream sectors.
Barely six years after making strong case for definitive policies to increase employment opportunities for Nigerians, the Chinese oil firm is caught in a dilemma of reversing itself.
It has concluded plans to sack the same Nigerians it sought to create jobs for. The looming mass sack has set the management and the inhouse Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on war path.
PENGASSAN leadership in Addax led by Chris Ogienwonyi, told TheNiche that 30 to 50 percent of the workforce, largely Nigerians may be thrown to the labour market, a development that has drawn a battleline between management of the company and the oil workers.
Series of warning strike action embarked upon by the workers to drawn attention to their plight came to a head on Tuesday, October 20, when the workers demonstrated at the headquarters of the company, chanting protest songs.
Addressing newsmen at the Victoria Island, Lagos office of the company, the PENGASSAN leadership faulted management’s approach, insisting that management should address issues of huge mismanagement of resources symbolised by a “wasteful and unsustainable lifestyle” of the company’s Managing Director, Cornelis Zegelaar.
Addax had cited ‘unresolved issues with the NNPC’ that led to a termination of crude lifting, unresolved ‘side letter issue’, and low oil prices, as three major reasons for the proposed staff cuts.
In a statement made available to newsmen on Tuesday, the company said that the reality of falling oil price has prompted action by all exploration and production players in the oil and gas industry, and that Addax is taking appropriate measures to align to the realities of the market by reviewing every resource management affecting company’s bottomline.
The statement, “Strategic Organisational Realignment”, dated October 20, issued by the company’s media relations officer, Bola Asemota, reads in part:
“The reality of falling oil price has prompted action by all exploration and production players in the oil and gas industry. There’s no exception to this, and Addax Petroleum is taking appropriate measures to align ourselves to the realities of the market.
“Every aspect of improved resource management affecting our bottomline, directly or indirectly, has been considered in all our operating entities. Material decisions have been made on our core business operations focusing on cost reduction.
“As part of the transformation of our business, Addax Petroleum is taking incremental steps to reach sustainability goals which will result in the reduction of a number of positions within the organisation in the short term.
“We have informed our employees and are supporting them in this process. We are also committed to working in close collaboration with all stakeholders and all regulatory authorities throughout the process,” the company stated.
PENGASSAN chairman, Addex Petroleum Branch, Chris Ogienwonyi, faulted management’s claim that it’s planned staff cut was to cut cost of operations.
The labour leader presents strong arguments against the position of the management.
He argued that the problem with the company is more of resource mismanagement symbolised by unsustainable lifestyle of the MD rather than fall in oil price, and other reasons adduced by Addax.
According to the union, rent of the residential property occupied by the Managing Director, Cornelis Zegelaar, is valued at over N40million per annum, even as he lives alone in the 9 bedroom mansion.
The worker’s union further cited that Addax funded a private jetty built for Zegelaar at the cost of N30 million, a jetty that he is yet to use in the three years since it was built.
“He has continued to incur costs on extravagant living, hiring and holding chattered flights sometimes, at the cost of about N2million per trip,” said the workers.
Related to this in terms of cost accumulation, is what workers described as heavy Back Charges of the Geneva Office to the Nigerian Business operations as the overhead of the Geneva Office is charged to Nigeria where cost recoveries are done under the Production Sharing Agreement with the NNPC.
The leadership of the inhouse PENGASSAN further accused the management of unilaterally deciding on a “weak severance package” without following due process of engagement to carry workers along.
The workers insist that if management is serious about cutting cost of operations, then it must start by addressing the “unsustainable lifestyle of the managing director and other sources of waste associated with the leadership of the company.
Reacting to the three reasons given by Management for the proposed staff cuts including ‘unresolved issues with the NNPC’ which has led to a termination of crude lifting, unresolved side letter issue, and low oil prices, Ogienwonyi explained that “Side letter issue” was resolved by immediate past administration of Goodluck Jonathan and that the new governemnt of Muhammadu Buhari upheld it as was resolved by previous government.
He also explained that the Federal Government has backed down on its termination of crude lifting, stressing that it was only for two months that Addax didn’t lift crude oil in its over six years of operation.
He challenged the company to publicly prove that the ratio of employees’ cost in relation to operational cost is high.
The workers insist management follows due process of disengaging staff, rather than unilaterally deciding on weak disengagement packages, contrary to what obtains in the industry.
They urged management to toe the examples of other companies in the industry that recetly downsized staff strength in collaboration with all stakeholders, particularly the workers, in the process of its organisational realignment.