The Petroleum and Natural Gas Senior Staff Association of Nigeria, as well as the Nigeria Union of Petroleum and Natural Gas Workers, have rejected announced plans by the Federal Government to divest significant stakes in Joint Venture assets, managed by the Nigerian National Petroleum Company Limited.
The two unions warned that the move to allegedly amend the Petroleum Industry Act and remove the running of oil and gas from the NNPCL could endanger the country’s economic stability, weaken its oil industry, and jeopardise the welfare of workers.
They stated that the policies are dangerous and capable of bankrupting the Nigerian National Petroleum Company Limited.
The oil workers urged President Bola Tinubu to intervene and halt the plan.
Last month, the president directed a comprehensive review and reassessment of NNPC’s 30 per cent management fee and 30 per cent frontier exploration deduction provided under the Petroleum Industry Act.
He tasked the Economic Management Team, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, to present actionable recommendations to the FEC on the optimal way forward.
“We must urgently review and optimise our savings. This includes enhancing spending efficiency and reviewing deductions from the Federation Account, such as the cost of collection by revenue agencies, such as FIRS, Customs, NUPRC, and NIMASA.
“There is also the need to reassess the 30 per cent management fee and the 30 per cent frontier exploration deduction by NNPC based on the Petroleum Industry Act. We must optimise every available Naira to sustain our momentum and finance our growth trajectory, especially in a time of global liquidity constraints.”
Addressing a joint briefing in Abuja on Tuesday, PENGASSAN President, Comrade Festus Osifo, alongside his NUPENG counterpart, Williams Akporeha, said the proposed sale would not only undermine national revenue but also mortgage the future of coming generations.
The oil workers argued that the government’s plan to cut its stakes in JV assets, currently between 55 and 60 per cent by as much as 30 to 35 per cent for quick cash, was short-sighted and dangerous.
The unions recalled past divestments by international oil compasuch as ENI, ExxonMobil, and Shell, which saw their Nigerian operations99099 acquired by domestic firms.
The unions insisted that further sales of government stakes would leave NNPC Ltd weakened and unable to meet critical obligations such as salaries, benefits, and national budget contributions.
Osifo said, “The government wants to reduce its stake in these assets; principally, they want to sell huge percentages in these assets. In some places, they sell up to 35 per cent, in some places they sell up to 30 per cent, so that they will have some cash to spend in other areas.
“That is the excuse that they are giving. But as an association, as PENGASSAN and NUPENG, we say no, no, no to this. You cannot mortgage our future today, and tomorrow we will be starving as a country.
“If we allow this to continue, it has a way of making NNPC bankrupt in the next few years. There are obligations that must be met; the chief of these obligations is the payment of staff salaries and the welfare of our members.
“Whoever mooted this idea, whether from the Ministry of Petroleum, Ministry of Finance, NNPC Ltd, or the Presidency itself, we reject it 100 per cent.”
He added, “As you could recall a while ago, there were some divestments that took place in some of these JVs. If you could remember very well, in the ENI, Nigeria Agip Oil Company, it was bought over by Oando Energy and Natural Resources. And also, Seplat bought over the JV components of ExxonMobil.
“Today, there is a plan being moved by the government to reduce its stake in these JV operations. Currently, the government holds between 55 per cent and 60 per cent of the JV assets in these companies. That is the stake of the government today. And this stake of the government today is being managed by NMPC Limited. So, they manage this JV on behalf of the Federation.
“Remember, every crude oil asset in Nigeria, every oil well in Nigeria, is not just owned by the federal government, but it is owned by the federation. And NNPC Limited is managing these assets on behalf of the federation. So the federation is everybody, collectively.”
On the concern over the alleged ongoing moves to amend the PIA, passed in 2021 after decades of debate, they alleged that the Ministry of Finance was seeking to remove the Ministry of Petroleum from joint ownership of NNPC Ltd, which they described as an aberration and a backdoor attempt to hijack the company.
The two union leaders said that the amendments would strip NNPC Ltd of its core national role, undermine investor confidence, and eventually drive the company into bankruptcy.
They said, “As a responsible association, we will fight this with everything in us because we strongly believe that these amendments that they are proposing it is not correct, they are totally wrong.
“We have seen that it is a national oil company that manages the PLC on behalf of a country, on behalf of a federation. So, if you don’t have ulterior motives, why do you want to move? Yes, we are happy because we also have members in the regulatory arm. But, unfortunately, the regulators are supposed to be the police of the industry.
“The regulators are supposed to be there to ensure that everybody plays according to the rules. So, it is totally wrong if you don’t have ulterior motives to say that you want to move the NNPCL management to the regulator as a concession. It is totally not correct.
“So, for us, we are totally against this. Let us do what is right as a country. What they are doing today is sending negative signals to the investors. What they are doing today they are telling the world that yes, we have passed PIA. It is a law, but they don’t rely on the law that we have passed. That is clearly what they are doing as a government.
“And I think President Bola Ahmed Tinubu should look at this carefully and should call these people to order. He should call the Minister of Finance. He should call the Board Chairman of the NNPCL, he should call GCEO and NNPCL to order, and let them understand that this is not the direction to go.
“If all these were done before he came on board, I’m not sure that he would be able to get revenue to drive the budget. So, for us, we are sending a strong warning to them that they should cease because it’s teaching time, save time.”
On his part, Akporeha, criticised the government’s inconsistency in oil sector reforms, noting that the PIA, which was enacted barely three years ago, has not been given enough time to stabilise before attempts to amend it.
“The investors are just beginning to understand the PIA and how to key in. Suddenly, the government is talking about amendments. When laws are inconsistent, they scare away investment. Every oil-producing nation protects its national oil company, but here, we are trying to strip ours of everything,” Akporeha said.
