The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) have kicked against alleged plans by the federal government to sell significant stakes in Joint Venture (JV) with international oil companies operating in the country.
The oil and gas industry labour unions accused the federal government of attempts to mortgage Nigeria’s future by selling the oil and gas assets.
The labour unions accused the federal government of attempts to mortgage Nigeria’s future by selling the oil and gas assets.
The Nigerian government stakes in the oil and gas assets are managed by the Nigerian National Petroleum Company Limited (NNPCL). Currently, the federal government holds between 55 and 60 per cent of such assets.
They warned that the move could weaken NNPCL and pose a threat to the country’s economic stability.
The action of the labour unions follows a directive by President Bola Tinubu last month for a reassessment of NNPC’s 30 per cent management fee and 30 per cent frontier exploration deduction under the Petroleum Industry Act (PIA).
READ ALSO: Oil Sector Drives Nigeria’s GDP Growth Surge
Pinnacle Daily reports that President Tinubu had on August 13, ordered a review of deductions and revenue retentions by the NNPCL and other major revenue-generating agencies in the country to boost public savings and unlock resources for growth.
Other agencies that the directive applies to include the Federal Inland Revenue Service (FIRS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Maritime Administration and Safety Agency (NIMASA).
Reacting to that, the two labour unions in a joint press conference on Tuesday rejected the government’s alleged plans to cut its stakes in JV assets by as much as 30–35 per cent.
“Government wanting to reduce its stake in these assets, principally, they want to sell some huge percentages in these assets. In some places, sell up 35 percent, in some places sell up 30 percent, so that they will have some cash to spend in other areas,” the two unions jointly stated.
READ ALSO: Fidelity Dumps $276M in Bitcoin
“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.”
The PENGASSAN President, Festus Osifo, and his NUPENG counterpart, Williams Akporeha, warned that selling off the assets would apart from increasing control of the sector by international entities and private investors, affect the government’s ability to generate revenue to fund the national budget and also defend the naira at the foreign exchange market.
They warned that if allowed, the move could make “NNPC become bankrupt in the next few years.”
The oil workers called on the government to halt the proposed amendment of the PIA, arguing that it would strip NNPCL of its core national role, and scare away investors.
The NUPENG president stated that every serious oil-producing country protects its national oil company, but Nigeria chooses to weaken.
Osifo argued that making inconsistent laws is a recipe for scaring away investments as they send wrong signals to investors. He vowed that they will not allow the plans to be implemented by the government.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
