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Total Resumes Nigeria Production

The Wall Street Journal: Total Resumes Nigeria Production

“5 Top Jobs To Nigerians: “Similar disputes were simmering Thursday in Shell”

DOW JONES NEWSWIRES

July 8, 2004 3:57 p.m.

LAGOS, Nigeria (AP)–Energy giant Total S.A.’s (TOT) subsidiary said it was pumping oil and gas again Thursday, ending a six-day shutdown over fears that a threatened oil union strike could bring violence.

Elf Nigeria, Total’s subsidiary in Africa’s leading oil-producing nation, agreed to give five top oil-field jobs to Nigerians, unions said, answering their immediate complaint that supervisor positions were going to expatriates.

Production resumed by midday and was expected to return to full capacity within 12 to 24 hours, an Elf Nigeria spokesman said.

Elf Nigeria – fearing violence and sabotage if workers staged a threatened strike – stopped pumping the 235,000 barrels of oil and 187 million cubic feet of natural gas it normally produces each day. The shutdown accounted for roughly 10% of Nigeria’s total production of 2.5 million barrels a day.

Nigeria is the world’s seventh-largest oil exporter and the fifth-biggest source of U.S. oil imports. Analysts said the amount lost represented roughly 10% of the world’s excess capacity at a time of disruptions in supply from Iraq.

Government, management and union officials reached an accord overnight to resume production, after days of talks in the southeastern oil city of Port Harcourt.

Unions had accused the company of reserving top production jobs for expatriates.

A copy of the deal, obtained by The Associated Press, showed that Elf Nigeria agreed to name Nigerian employees to production superintendent posts in five oil fields.

Unions also had asked for better pay packages and expressed opposition to a planned reorganization that labor leaders feared might mean job cuts.

The Elf Nigeria spokesman said an agreement had been reached on all major issues but refused to elaborate.

Similar disputes were simmering Thursday in Shell (SH, RD) and ExxonMobil’s (XOM) Nigeria subsidiaries.

Shell unions called a two-day “warning strike” recently in opposition to a restructuring plan that would cut jobs by 30 percent. Government and national union leaders said Thursday that talks between Shell and unions on the issues are “positive.”

On Monday, unions gave ExxonMobil a 21-day ultimatum to rectify what they said was an influx of foreigners into its Nigerian operations. The company said it was discussing the matter with unions.

A separate accord early Thursday between government and unions raised hope of staving off a threatened nationwide oil industry strike later this month.

Following overnight talks in the capital, Abuja, the government agreed to reform the nation’s pension bill as demanded by labor groups.

The government also pledged to upgrade Nigeria’s aging oil refineries.

“The government has addressed virtually all our grievances and clarified a lot of issues. We are satisfied,” said Brown Ogbeifun, president of the white-collar Petroleum and Natural Gas Senior Staff Association of Nigeria.

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