Addax Employees Cease Strike, Start Working Again

As a result of multiple interventions from various parties, Addax management has agreed to meet with the branch leadership of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, on Tuesday, August 2, 2022, in order to resolve outstanding labour disputes.

As a result, the striking workers have called off the work stoppage that they began on July 27, 2022.

According to one of the striking workers, “With this development, Lagos zonal leadership has directed that normalcy be restored across all locations including OML 123, 124, 126 and 137 effective immediately.

“The national leadership of the Association will continually engage all stakeholders for  timely resolution of the outstanding items.”

Addax Petroleum Development Nigeria (APN) employees' protest over alleged anti-labour practices reportedly caused a drop in Nigeria's oil production of at least 22,000 barrels per day.

Before becoming a limited liability company, Addax, which is owned by China's Sinopec Group, operates the assets under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) and holds four Oil Mining Licences, OML 123, 124, 126, and 137.

About 324 Nigerians work for the company, including 141 permanent employees and 183 contract workers.

After multiple attempts to engage Addax management on outstanding labour concerns were unsuccessful in the wake of the Federal Government's declaration that APN's licences had been revoked, the striking workers, operating under the auspices of PENGASSAN, started their industrial action on Wednesday.

If the corporation refused to hire them, the disgruntled workers threatened to shut down all of the company's activities, including oil wells, valves, crude lifting, and export terminals.

Following the APN Management's warning of its employees about the NNPC's withdrawal of operating licences at a town hall meeting, it was learned that the two parties met and agreed on a financial term of exit settlement for all the employees.

Sources claim that it was decided that the financial exit settlement would be carried out on July 1, 2022, the day that Addax Petroleum Nigeria's PSC agreement for OML 123 and 124 would expire.

One of the staff however  said,  “Addax Management has so far rebuffed our calls for the execution of the financial exit settlement and other employees ‘related issues.”

The striking workers claimed “that the Federal Government has done everything possible through the National Petroleum Investment Management Services, NAPIMS. All attempts to get the Management to the negotiation table to ensure issues are settled amicably have been frustrated by APN.”

Confirming the development, PENGASSAN’s Senior Assistant General Secretary, Lagos Zone, Babatunde Oke said “the strike was embarked upon by our members due to the Management’s refusal to engage our Association on the financial settlement earlier agreed on.

“The workers have waited patiently for the Management,  trying to understand its plights but it is like they are insensitive to our own problems.

"Many letters have been written asking for a meeting but the Management refused to meet them.”

The former Department of Petroleum Resources, or DPR, revoked Addax's licences in March 2021.

The regulatory body asserted that Addax Petroleum's failure to properly develop the concerned assets was the reason the licences were withdrawn, claiming that this move had deprived the government of potential revenue of the assets.

The DPR, now known as the Nigeria Upstream Petroleum Regulatory Commission, asserted that the assets' average reserve profiles revealed that oil reserves have essentially remained flat because Addax never made an effort to increase the reserves.

It also stated that crude oil production at all three of the assets has been declining over time as a result of the company's insufficient investment.

The company failed to develop this asset in accordance with the government's gas revolution programme, which the company referred to as "economic sabotage," according to the report, which said that the entire OML 137 has approximately five trillion cubic metres in two key reserves.

The revocation was recently verified by Engineer Gbenga Komolafe, the current Chief Executive Officer of NUPRC, who reaffirmed that Addax declined to renew its licences and that those licences thus stood cancelled.