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Expatriate quota as ‘banana peel’ for oil giants
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Exxon facility
At the heart of the recent crisis in ExxonMobil was the issue of expatriate quota, an age long issue which often pitch Nigerians against the management of most oil companies.
The expatriate quota, not a few Nigerian oil and gas subsector watchers believe, has been grossly abused by many of these multinational oil companies.
Perhaps to under score how worrisome and nagging this issue has become, the Department of Petroleum Resources brought the issue of abuse of expatriate quota to the recently organised workshop on local content development. At the forum, the DPR had lamented the rate at which oil companies bring into the country, their country men under the pretence that there no qualified Nigerians to handle what they often describe as “some technical” jobs. Miffed by this development, the agency had with held the renewal of the permit of a multinational oil firm which it accused of abusing its expatriate quota. The company concerned was alleged to be having about 400 expatriates out of it 640 work force.
Most of these companies, BusinessDay gathered, often distort facts, by lying to the government agencies that they do not have more than 150 expatriates, whereas most often, they have more than double of what they declare to have.
Nigerian agents also do not help matters as the urge to make some quick money encourage them to collaborate with these companies to circumvent the rules and regulations guiding the recruitment of expatriates.
For instance, it was further discovered that most of these companies prefer to bring their own people to solve the unemployment problems at the expense of the country.
Oil industry watchers noted that although the ExxonMobil crisis may have come and gone, but its effect lingers on the economy as the country was almost brought to its knees. They say in crisis free times, the company ranked second in terms of crude oil production after Shell, with a daily production level put at 800, 000 barrels per day. This was however almost knocked off completely for eight days because of the strike embarked upon by the in house union, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
While this was on, militants in the Niger Delta struck at Shell's facility and shut in 164,000 barrels per day thereby bringing the total loss in the eight days come to 7.712 million barrels which translated to a lose of $902million.
The strike aslo reduced the country's crude oil output to about 50 per cent.
Technically speaking however, experts say the country has a capacity to produce over two million barrels of crude per day, but recent problems in the Niger Delta has affected it from meeting this capacity.
Production from the Yoho, Oso (condensate) and Qua Iboe fields in the east, along with Erha offshore production in the west, have also been disrupted. So Messy is the situation that the company had to declare force majeure on exports from the Qua Iboe terminal.
Other grievances of the union have to do with the integrity of the pipelines that convey crude oil to various terminals, and the review of their salary package and the issue of casual workers.
Meanwhile, the lack of an early resolution of the rift between the management of ExxonMobil and the union prolonged the damaging effect of the country's inability to export a substantial portion of its crude oil.
Analysts are of the view that government’s intervention was rather too late on the matter in view of the costly implication it portends for the economy. "This would show you the level of seriousness government attaches to the various problems confronting the country. This problem should not have been allowed to snow ball into to a crisis if things were properly managed," an industry analyst said. Besides, it is time for us to treat the recent problems in Exxon Mobil as a national issue as failure to do so connotes danger for us as producing nation.
“Exxon Mobil is a very important facet of our production capacity as a nation and a failure to nip the problem there would amount to us losing over one million of our total capacity."
The director of DPR, Tony Chukweke had said the Exxon Mobil strike should be resolved if the country is to remain among oil top producers in the world.
According to him, the situation should and must be treated as a matter of national importance. This situation coupled with the various shut ins due to problems in the Niger Delta. If this is allowed to continue it would portray the country in a bad light to the world at large.
Experts have further estimated that following the militant attacks, Nigeria’s output has persistently continued to drop such as the country can now produce only about 75 percent of its official production capacity of 2.5 million barrels per day with Royal Dutch Shell being the largest oil operator in Nigeria, accounting for about half of the country's 2.1 million barrels per day output. The company has seen a wave of attacks on its facilities in recent months.
Unfortunately, crude-oil futures retreated to $119 a barrel, from a new record near $120, attained during the strike added incessant.
Perhaps to under score how worrisome and nagging this issue has become, the Department of Petroleum Resources brought the issue of abuse of expatriate quota to the recently organised workshop on local content development. At the forum, the DPR had lamented the rate at which oil companies bring into the country, their country men under the pretence that there no qualified Nigerians to handle what they often describe as “some technical” jobs. Miffed by this development, the agency had with held the renewal of the permit of a multinational oil firm which it accused of abusing its expatriate quota. The company concerned was alleged to be having about 400 expatriates out of it 640 work force.
Most of these companies, BusinessDay gathered, often distort facts, by lying to the government agencies that they do not have more than 150 expatriates, whereas most often, they have more than double of what they declare to have.
Nigerian agents also do not help matters as the urge to make some quick money encourage them to collaborate with these companies to circumvent the rules and regulations guiding the recruitment of expatriates.
For instance, it was further discovered that most of these companies prefer to bring their own people to solve the unemployment problems at the expense of the country.
Oil industry watchers noted that although the ExxonMobil crisis may have come and gone, but its effect lingers on the economy as the country was almost brought to its knees. They say in crisis free times, the company ranked second in terms of crude oil production after Shell, with a daily production level put at 800, 000 barrels per day. This was however almost knocked off completely for eight days because of the strike embarked upon by the in house union, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
While this was on, militants in the Niger Delta struck at Shell's facility and shut in 164,000 barrels per day thereby bringing the total loss in the eight days come to 7.712 million barrels which translated to a lose of $902million.
The strike aslo reduced the country's crude oil output to about 50 per cent.
Technically speaking however, experts say the country has a capacity to produce over two million barrels of crude per day, but recent problems in the Niger Delta has affected it from meeting this capacity.
Production from the Yoho, Oso (condensate) and Qua Iboe fields in the east, along with Erha offshore production in the west, have also been disrupted. So Messy is the situation that the company had to declare force majeure on exports from the Qua Iboe terminal.
Other grievances of the union have to do with the integrity of the pipelines that convey crude oil to various terminals, and the review of their salary package and the issue of casual workers.
Meanwhile, the lack of an early resolution of the rift between the management of ExxonMobil and the union prolonged the damaging effect of the country's inability to export a substantial portion of its crude oil.
Analysts are of the view that government’s intervention was rather too late on the matter in view of the costly implication it portends for the economy. "This would show you the level of seriousness government attaches to the various problems confronting the country. This problem should not have been allowed to snow ball into to a crisis if things were properly managed," an industry analyst said. Besides, it is time for us to treat the recent problems in Exxon Mobil as a national issue as failure to do so connotes danger for us as producing nation.
“Exxon Mobil is a very important facet of our production capacity as a nation and a failure to nip the problem there would amount to us losing over one million of our total capacity."
The director of DPR, Tony Chukweke had said the Exxon Mobil strike should be resolved if the country is to remain among oil top producers in the world.
According to him, the situation should and must be treated as a matter of national importance. This situation coupled with the various shut ins due to problems in the Niger Delta. If this is allowed to continue it would portray the country in a bad light to the world at large.
Experts have further estimated that following the militant attacks, Nigeria’s output has persistently continued to drop such as the country can now produce only about 75 percent of its official production capacity of 2.5 million barrels per day with Royal Dutch Shell being the largest oil operator in Nigeria, accounting for about half of the country's 2.1 million barrels per day output. The company has seen a wave of attacks on its facilities in recent months.
Unfortunately, crude-oil futures retreated to $119 a barrel, from a new record near $120, attained during the strike added incessant.
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