Thursday, January 5, 2012

Genesis of Industrial action on Nigerian crude

 According to Reuters, Strikes and protests across Nigeria against a hike in fuel prices are unlikely to disrupt oil output in Africa's biggest exporter (Nigeria), industry players said, further calming supply fears after Royal Dutch Shell restarted two large fields.But a force majeure on Bonny Light crude oil exports on Thursday underscored the fragility of production in Nigeria, a key oil supplier to the U.S. and Europe.
Nigerian trade unions threatened on Wednesday to call a national strike starting on Monday, which they said would shut down large parts of the country's oil industry, if the government failed to restore a fuel subsidy.
Protests have already swept across the country, from the commercial capital Lagos in the south to Kano in the north.
Police used tear gas to disperse Kano protesters on Thursday, witnesses said, after they had camped out in the central square overnight.
The government said it would not budge on the subsidy, which it removed on Sunday as part of sweeping economic reforms. That set the scene for a showdown with unions and protesters angered by a sharp rise in fuel prices.
The unions promised to shut down "all offices, oil production centres, air and sea ports, fuel stations, markets, banks, among others".
But oil industry players told Reuters on Thursday there would probably be minimal disruption to facilities.
"If union members strike, management will take over their roles in the short term," a spokesman for the Nigerian National Petroleum Corporation said by telephone.
"If talks fail and there is a strike, we will make sure all our facilities are secure. We are reliant on oil production for our foreign exchange earnings, so we will sustain production."
LITTLE IMPACT ON OUTPUT
Officials at major oil companies, none of whom could be quoted, also shrugged off any likely impact on output.
"Most of the processes are automated, so there won't be an impact on production," a senior official at an international oil company told Reuters.
"If they eventually go on strike ... We're going to have people who are non-union members working," he added.
The only risk to output could be that demonstrators attempt a total blockade on production, which happened during an election dispute in 1993, but few in the industry expect the protest to be that well organised and determined.
"If they go ahead and shut everything down, that would have a major impact for which we have no contingency plan," said one oil worker. "We're monitoring the situation."
Production has resumed from Nigeria's 200,000 barrel per day (bpd) offshore Bonga oilfield, Shell said on Thursday, after the facility was shut down by a loading accident that caused the country's biggest oil spill in 13 years.

It also said its shallow water offshore 115,000 barrel per day (bpd) EA oil field restarted production on Dec. 27, after it was shut down for maintenance work.
Nigerian crude oil values slipped on Thursday, under pressure from ample supplies of sweet crude, shrugging off the threatened national strike and the force majeure on Bonny Light loadings.
The force majeure was declared because of a leak in Shell's Nembe Creek Trunk Line, which handles about 70,000 bpd.
The pipeline in the swampy creeks of the Niger Delta was shut down on Dec. 24 but that went unreported, eclipsed by a much bigger leak at Shell's offshore Bongo facility. Shell blamed the leak on sabotage by oil thieves.
Oil prices fell on Thursday, pressured by an unexpected build in U.S. crude stockpiles that outweighed concerns that rising tensions between the West and Iran will disrupt supplies.

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