Nigeria’s two oil unions began an indefinite strike that they say will curb exports from the West African nation responsible for pumping more than a quarter of the continent’s crude.
“You will soon begin to see shutdowns of our oil flow,” Emmanuel Ojugbana, a spokesman of the Petroleum and Natural Gas Senior Staff Association of Nigeria, said.
Ohi Alegbe, an Abuja-based spokesman for the Nigerian National Petroleum Corp. and the Oil Ministry, declined to comment on exports.
Any reduction in pumping would coincide with a collapse in the price of Nigeria’s biggest source of revenue.
Brent crude oil plunged 44% this year. It rose as much as 2.3% to $63.25 a barrel in London today.
Nigeria needs about twice that to balance its budget, according to estimates in October from Deutsche Bank AG.
“If the strike is allowed for another few days, I can assure you that there will be complete shutdown because this is an indefinite strike,” Ojugbana said today from Warri, a southern oil hub.
The action involves both Pengassan, as the managerial union is known, and the Nigerian Union of Petroleum and Natural Gas Workers, or Nupeng, its affiliate for manual workers.
Nigeria’s crude oil output declined 3.2% when they last went on strike in September, data compiled by Bloomberg show.
Nigeria pumped 2.3 million barrels of crude oil a day last year, 26% of Africa’s total output, according to BP Plc estimates.
The action is to protest government failure to fix refineries, cut gasoline prices in line with the slump in crude, and also to press for the passage of a new oil law, according to a statement from Pengassan.
Domestic supply won’t be affected, with about 17 fuel tankers waiting to unload at the port of Lagos, NNPC’s Olegbe said.
The strike “will not dislocate the robust distribution and sale of fuel to members of the public,” Olegbe said.
The nation has about a month’s supply of oil products in stockpiles, he said.
Workers at oil fields and those operating flow stations that pump crude to export terminals are joining the strike, meaning a protracted action could disrupt exports, Ojugbana said.
Domestic gasoline supplies may also be curtailed, Pengassan said.
The two unions want the authorities to expedite passage of the petroleum industry bill, curtail crude theft and pipeline sabotage, and address what they say are unfair labor practices by some energy producers, according to its statement.
The West African nation relies on crude for about 70% of government revenue and 95% of foreign exchange income.
“The strike will not be suspended until there is strong commitment from the government and affected operators to resolve the issues,” Ojugbana said.
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