Striking Nigerians

On another note, it turns out that Nigerians in the oil industry like to strike. My trip to Nigeria was actually postponed due to one of the strikes happening against ExxonMobil. It’s a clever trap they have set up. Nigeria allows an oil company to come in and pump oil but they have to use 85% Nigerian workforce. Begrudgingly, oil company agrees, and then proceeds to set up training centers so that Nigerian citizens are skilled in the necessary areas. This national content also usually applies to materials, so now the contracting companies build fabrication yards so that the materials can be manufactured in country. Now that the workforce and the material is controlled by Nigerian citizens, the unions go to work. The unions make demands for raises or they will shut everything down. First, they can and will shut everything down, and second, their request seems understandable since they are paid relatively low wages in comparison to the expats. So Oil Company gives in. In the case of XOM this has evidently resulted in a 28% raise every two years or so. But this year has set a new precedent. With oil prices as high as they are, the unions are making stricter demand. In XOM’s case, a 30% raise fresh after getting a 28% raise. Now the oil company’s are in a pickle. They do not want to give in, because at some point this precedent will result in equally paid or better paid nationals than expats (see post ”We’re all Doc Thompsons Children” on why that is not exactly fair) making the idea of being in Nigeria unprofitable. So the companies resist. The government is a partner in all of these projects, so when oil company loses money, they also lose money. This is why the Nigerian oil company is currently in the poor house. So the government tries to intervene, but unfortunately Nigeria has no control over its unions, rendering it powerless. So Union flexes its muscle and shuts everything off, forcefully. The office that I sit in right now forcibly (but peacefully) kicked everyone out when the strike took place. Similarly, people shut down platforms, closed wells, and went home. Now Oil Company is really in a bind. They are here for oil, and every day shut in is probably a half billion dollars in revenue… do they need oil more than the employees need a paycheck? Evidently the oil company loses every time. Shell, ExxonMobil, and currently Chevron are all subject to the same extortion, but they take it. I find the whole thing to be extremely ironic. The same thing that Europeans did to Africans all those years ago, are happening in reverse today. Now I don’t think two wrongs make a right, but in this case I remain neutral. The only thing that Nigeria needs to watch out for is revolt. Just like there were occasional revolutions against European colonies, these oil companies may revolt by pulling out, which recently happened in Venezuela. This industry is great.