PLANS by the Anglo-Dutch oil giant, Shell Petroleum Development Company of Nigeria Limited (SPDC), to sack many of its Nigerian employees in what it calls a re-structuring exercise may have earned the company a summon from the Federal Government.
There are indeed suspicions that the said restructuring might be a ploy to ease out Nigerians from the system and replace them with expatriates.
The restructuring, sources say, might also not be unconnected with losses incurred by the oil firm through militant activities in the Niger Delta.
. The government has directed the Nigerian National Petroleum Corporation (NNPC) to demand justification for the exercise, which will throw many Nigerians into the Labour market and make nonsense of the Nigerian content for the petroleum industry.
Already, the NNPC has instructed its upstream supervisory body – National Petroleum Investment Management Services (NAPIMS) – to call a meeting before the end of this week to seek explanation on some grey areas in the re-structuring exercise which government feels is recurring too frequently from the Shell group in Nigeria.
Sources at the Ministry of Energy in Abuja told The Guardian that the management of the NNPC had written a memo to the Minister of State for Petroleum, Mr. Odein Ajumogobia, over the issue and that it also met last week Friday to deliberate on the issue.
It was also gathered that the management of NAPIMS has severally requested Shell boss, Mutiu Sunmonu, to justify the planned restructuring but all the explanations given were not satisfactory to the agency.
The Guardian source said among the issues that would be on the agenda for this week’s meeting between the NNPC and Shell are:
That Shell must submit all the names of the expatriate staff that are affected in this exercise as well as their Nigerian counterpart;
Nigerians had occupied some positions for years and therefore seek justification for bringing an expatriate to occupy the positions at the expense of qualified Nigerians in Shell group;
that Shell should explain the concept of “common services” in the re-organisation exercise as the company’s Joint Venture Operation (JV) as well as Production Sharing Contract (PSC) which falls under different fiscal regime or contract with the government; and
the government will also want to know from Shell management how the severance package, which has not been approved by all the partners in the joint operation, would be funded, particularly whether it is part of this year’s JV budget.
The Guardian source noted that there are so many other issues that the company had not resolved with the government before embarking on this action, stressing that as a company operating a joint venture business, Shell needs government’s approval through NNPC or NAPIMS before executing any project.
Shell’s spokesperson, Mr. Precious Okolobo, sent the following e-mail to The Guardian yesterday in response to enquiries on the matter.
The Guardian: Will all categories of staff (Nigerian and expatriate) be affected in the re-organisation?
Okolobo: Yes.
The Guardian: We understand those who will be asked to leave are being offered ‘juicy packages’ – how will you fund these payments?
Okolobo: We are committed to following all the legal requirements and contractual agreements associated with any release of personnel and we will honour such obligations. Beyond this, we are unable to provide details of individual agreements, as these are covered by confidentiality obligations.
The Guardian: Did you get approval from the government before embarking on the exercise?
Okolobo: Our SPDC JV partners have been informed. Their companies already tend to operate as a single entity in the country.
In the background information attached, Okolobo explained that the re-organisation was to enhance efficiency and accountability and reduce costs by taking advantage of synergies and eliminating duplication by reorganising the core business functions and the provision of support services between the three companies – The Shell Petroleum Development Company LTD (SPDC), Shell Exploration and Production Africa (SEPA) and Shell Nigeria Exploration and Production Company (SNEPCo) into one integrated organisation under a project called ‘One Shell’.
The Guardian however gathered that the letters of termination of appointment would be served to affected employees from the first week of March.
Besides, The Guardian gathered that majority of those to be affected would be mostly from support departments such as administrative, public affairs, logistics and others while those found to be incompetent would be affected in core operational
areas.
“The final list is almost ready. The management is in the process of fine-tuning the list and also seeking the understanding of the senior partner and the industry regulatory body. They may go ahead with the plan under the guise of anticipatory approval,” the source said.
Besides, the source disclosed that talks are currently on between the various Labour unions and management on necessary compensations to accrue to affected staff.
“Shell, due to massive loss incurred as a result of the continued violence in the Niger Delta had actually decided to reduce its staff strength from last year but series of persuasion had delayed the process till now.
Only about one quarter of the people on Shell’s pay roll are actual staff while majority are engaged on contractual basis. So, in essence, only a few of its key staffer would be affected by the purge.
Shell has over the last three years been losing about 650,000 barrels of crude per day due to the facility shut-in occasioned by militant activities in the Niger Delta region.