2-IN-1 STORY: Oil Prices Crash To Epic Lows After US Vote As Nigerian Oil Workers Reject PIB

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Crude oil prices on the global market crashed on Monday to epic lows, as they beat 2008 global economic crisis prices and sank beyond 11-year low with the US vote to lift ban on oil exports. New data released on Monday, revealed that the price of crude oil in the OPEC basket of twelve crude, stood at 31.63 dollars – an 11-year-low.

The last time the OPEC basket stood at a daily low of less than US$32 was in April 2004, when it traded at US$31.32.

TheCable report continues:

Brent crude oil prices also fell to levels last seen in 2004, falling to as US$36.17 per barrel around 0500 GMT, with production around the world remaining at or near record highs.

The prices are the weakest since 2004 and below the US$36.20 low reached on Christmas eve 2008.

US West Texas Intermediate (WTI) futures were down 33 cents at US$34.40 per barrel and close to last Friday’s 2015 lows.

This comes only a few days after the US voted to lift a 40-year-old ban on crude exports which could see some of its excess production sold on the global market.

Analysts say lifting of the ban would increase the already increasing oversupply of global crude and drive prices to new lows in 2016.

Meanwhile, the Nigerian government has pegged its oil benchmark for the 2016 fiscal year at US$38.

The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Nigerian Oil Workers Reject PIB

The Nation reports that Oil workers in the industry’s three regulatory agencies have rejected the redrafted Petroleum Industry Bill (PIB) soon to be presented to the National Assembly. The PIB is to replace the one passed by the Seventh Assembly but which was not assented by the president.

Minister of State for Petroleum Resources Dr. Ibe Kachikwu had announced plans by the government to send another draft of the bill for the lawmakers’ consideration. The old bill, he said could not meet the yearnings of value-addition to the oil industry. But the content has not been made public.

But yesterday, workers in the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Equalisation Fund (PEF), said they would not accept the draft bill because it neglects their welfare.

The workers said: “Petroleum Industry Governance & Institutional Framework Bill 2015”, if allowed to be passed into law, the bill, will lead to job cuts in some of the regulatory agencies. The bill seeks to provide the governance and institutional framework for the petroleum industry and other related matters.

The workers operating under the auspices of Regulators Forum have petitioned the national leadership of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) not to allow the bill scale through without taking care of the anomalies contained in it.

The petition signed by PENGASSAN Chairman, PPPRA Chapter, Victor Ononokpono, along with his DPR counterpart, Garba Bello, and PEF, Aminu Ahmed, said the concerns of the workers bordered on observations that the redraft institutional and legal framework for reforms in the oil and gas industry may have inadvertently left the oil workers in the cold.

While commending the Minister’s effort to stimulate reforms in the industry after several failed attempts, they argued that some inconsistencies in the draft PIB had stirred some fears about a veiled attempt by the government to sack its members.

They drew attention to some of the inconsistencies, especially in Part 3 of the redraft PIB which seeks to establish the Nigeria Petroleum Regulatory Commission (NPRC), Section 13, on the composition of its Board, and Section 87, on the Transfer of staff.

They noted that the Bill provides that the Commission would combine the monitoring and regulatory roles and responsibilities of DPR and PPPRA to “administer and enforce policies, laws and regulations relating to all aspects of petroleum operations.”

They expressed concern about the silence of the redraft Bill on the fate of the Petroleum Equalization Fund (PEF) vested with the responsibility of ensuring uniform pricing of petroleum products, adding that “the union senses a subtle ploy to retrench or drop some of the work force transiting to the Nigeria Petroleum Regulatory Commission with the contentious clause on ‘transfer of certain employees.

“Cessation of employment and transfer of staff should be automatic and guaranteed as provided by the Public Service rules and Constitution of the Federal Republic of Nigeria.”

According to the workers, unlike the former PIB, the redraft bill does not make provision for the representation of the organized labour on the board of the Nigeria Petroleum Regulatory Commission (NPRC).

To the workers, the redraft bill is a departure from the provisions of the original draft 2012 Bill. Part D, Section 47 (2) (f) and (g) on the Board of the Downstream Petroleum Regulatory Agency (DPRA), representatives of the two major oil workers unions, the National Union of Petroleum and Natural Gas Workers (NUPENG) and PENGASSAN were listed as members.

“Apart from the uncertainty of the agency’s institutional role, the draft Bill as currently drafted will create job loss, as no provision for absorption or transfer of service for the work force is contemplated,” the oil workers’ representatives said.

“The Central Working Committee must make a public position known on the non-inclusion of organized labour in the composition of the governing Boards of Commission against international best practice.”
They asked the national unions to extract a memorandum of understanding on the re-drafting of the contentious issues, particularly as it concerned job loss of PENGASSAN members across the existing agencies (PEF, PPPRA and DPR).