PENGASSAN proposed picket: NECONDE raises alleged threat to $558m assets


The Management of Neconde Energy Limited, a member of the Obijackson Group and operator of the Oil Mining Lease (OML) 42, has raised the alarm over threat to its $558 million, about N200.8 billion, asset.

Frank Edozie, the Managing Director of the company, disclosed this during an interactive session with journalists on Sunday in Lagos while cautioning PENGASSAN over picket plans on May 15.

Mr. Edozie alerted the public on plans by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to picket the company over issues relating to severance package.

He explained that in March 2016, Neconde and PENGASSAN entered into an agreement over welfare issues, including increased severance package, transfer and 13th month allowance with a caveat that the agreement will only be implemented once production hits 70,000 Barrels Per Day, BDP.

However, he expressed surprise that despite the fact that the current production level remained at 15,000 bpd, PENGASSAN in alliance with some workers of Neconde have concluded arrangement to picket the company on May 15.

The Neconde boss said that a component of its strategic goal for the year to achieve the 70,000bpd target has led it to develop “barged production” as an alternative to crude evacuation using the Trans Forcados Pipeline which has been out of service since February 13, 2016.

“We have also undertaken some strategic steps, such as rehabilitation of Batan and Odidi Flow Stations to enable the achievement of our targeted peak gross production rate.

Despite the idle state of the asset, he said, the company has remained committed to workers welfare and prompt payment of salaries, especially during the period when oil prices remained at its lowest ebb.

“Additionally, we had to relocate our operations to Warri from Lagos, for us to be closer to the base to better enable us to meet our goals of increasing our contributions to the Nigerian economy.

“Expectedly, this relocation meant redeployment of employees to the new location, and this was executed in a manner that the associated inconveniences to employees were duly considered and properly mitigated,” he said.

According to Mr. Edozie, “we are currently in talks with the leadership of PENASSAN to ensure that we reach a mutually beneficial agreement on some of the demands presented by the association.

“The management provided the association with an update and called for a meeting to discuss any remaining potential areas that may still exist.

“So far, management and the company have enjoyed their co-operation and hope that the association will continue to abide by best-in-class labour union practices by exploring negotiation and collaboration as labour relations tactics.”

Mr. Edozie said that Neconde, an indigenous Exploration and Production company with strong management and extensive in-country experience, is fully aware of the challenges facing the sector, and as a key Nigerian player.

He said that the company’s goals and aspirations include creating value from every constituent of stakeholder network which includes employees and host communities.

Similarly, the Chairman of Obijackson Group, Ernest Azudialu-Obiejesi, expressed shock that PENGASSAN will decide to shut down offices of the company having agreed with the union that by August 2017 they would review the review package and salaries.

Mr. Azudialu-Obiejesi assured that the agreement reached in March 2017, regarding the review of the severance packages, would be implemented.

According to him, “in March, we agreed with the union that by August 2017, we will pay the severance allowance and the 13th month salary based on our projections that by then we would have achieved our 70,000 bpd target’’.

“We owe 10 banks from which we obtained the $558 million we paid Shell in 2012 for 45 per cent stake acquisition of OML 42.

“We have also invested billions of dollars to develop the field but due to unfortunate incidents of pipeline attacks by the militants last year, we have been having cash flow challenges and the banks are also on our neck to service the loans.

“We have over 2,500 workers on our payroll and despite not producing at optimal capacity, we are not owing salaries,’’ he said.

On the effect of such strike action on federal government’s efforts to attract investment into the economy, he argued that investors, both local and foreign, will run away if such labour practices continue to sabotage company’s efforts to grow.


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