Thousands of contractors, oil workers, now idle on militant attacks

Posted by News Express | 29 July 2016 | 1,804 times

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Unrelenting attacks by militants and the consequent closure of terminals for repairs is taking a toll on economic activities in some of Nigeria’s oil producing states as thousands of local service contractors, vendors, temporary oil workers and ancillary service providers now idle away on account of shutting down of the terminals.

This is having a telling effect on local businesses which have shut down their operations, limiting tax revenue to the states, spiralling unemployment and leading to low capacity utilisation, as is the case with Marine Support Base Shipyard, where several new boats constructed by the company for the International Oil Companies (IOC) operations lie idle.

Investigations revealed that while some of the contractors are still maintained on the contractor register of the IOCs, many of them have not been mobilised for several months. This is leading to shutting down of businesses that serve the IOC’s, staff lay-offs and anticipated upsurge of criminal activities.

Worse hit are those engaged for Shell Petroleum Development Company (SPDC), Chevron Nigeria, and ExxonMobil affiliates, whose facilities have mostly been relieved of essential staff while they undergo repairs.

The July 14 declaration of force majeure – or freedom from contracted obligations because of extraordinary circumstance – which the company attributed to ‘system anomaly’ but which the Niger Delta Avengers claimed responsibility for, led to the closure of the company’s 300,000 barrels per day (b/pd) Qua Iboe terminal in Eket, evacuation of essential staff and shut-in of the terminal.

Home to over 400,000 people, Eket, the second largest city in Akwa Ibom comprises people of Eket, Esit Eket, Ibeno and Onne local government areas. It is a thriving hub of new oil and gas business, with more than 250 companies providing support services such as catering, flights, transport and exports.

“Business has slowed here since the company (ExxonMobil) moved a lot of its people away from the area,” said Harry Ime, who works for Ramsas Transport Company which operates bus services in and around Eket.

Inquiries at high end hotels such as Villa Marina, Royalty Hotels and Eden,  all in Eket, suggests  that they are witnessing a lull in patronage since the company shut its operations.

The scenario is not much different with other IOCs which now render skeletal services at platforms that have come under sporadic attack.

“I was last mobilised for work in February, before they (Niger Delta Avengers) blew up Shell facilities and till today, we are still waiting to be called,” said Martins Ndulue, a staff of a company contracted for SPDC.

Another source who renders vendor service to a company contracted by an indigenous marginal field operator, said that the departure of the IOCs staff from onshore platforms in the creeks, worse hit by militant attacks has slowed business considerably.

“Since the field workers returned from platforms that were attacked by the militants, we have not been engaged. I have had to lay off half of my staff, the others were placed on contract,” he said.

Checks of tenders by IOCs showed that they were too few and far between, as upstream investments dip on low oil prices and bruising militant attacks.

“Generally, business has been slow, but it just got worse after the problems there, though the police said it was a problem with their pipeline that made them close down,” Jude Monday, an accounting staff in one of the upscale hotels, close to an IOC said.

A source in ExxonMobil, who craved anonymity, said the company has increased threat levels, following threats to lives of personnel from militant activities. As precautionary measures, it has deployed even essential staff away from Eket, while threat assessment is on-going.

“ExxonMobil takes seriously its policy of ensuring the safety of lives of its personnel and a death of its staff resulting from militancy will leave many management heads rolling,” said the source.

It would be recalled that a statement from the Niger Delta Avengers, following the July 14 force majeure declaration, warned the company not to carry out any repairs.

“If ExxonMobil fails to listen to us (Niger Delta Avengers), your personnel are going to be our next casualties, not pipelines,” said the group.

“We all have a responsibility to manage risk as part of our roles, be that technical, operational or financial. Identifying, assessing and managing the risks is key to our operations integrity.” said Lynne Lachenmyer, ExxonMobil Safety, security, health and environment vice president, on the company’s website.

About 24 militant attacks since January have led to over 1,000 vandalised points, loss of about 1 million barrels per day production in May, creating an $11bn hole in the 2016 budget with a loss of 22 lives.

Source: BusinessDay (Nigeria). Reported by Olusola Bello and Isaac Anyaogu. Photo shows oil workers at work.


Source: News Express

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