About 3, 200 workers in the Nigeria’s oil and gas industry including managers and top officials in the public stratum are presently being faced with sack threats even as the cut in workers emoluments and salaries by the International Oil Companies (IOCs) hits $81,000 a year.
Global oil and gas recruitment firm, Hays, which revealed the salary cut in its annual report in which it surveyed 28,000 oil workers from 78 countries, declared that more pain is expected in 2016.
Oil, biggest revenue earner on Monday, crashed further below $28 per barrel.
“As many as 41 per cent of respondents expected salaries to decrease or remain the same this year, the highest percentage in at least six year,” the report revealed.
The employers in oil/public sector who are already penciled down to be sacked, New Telegraph gathered, include those of the Nigerian National Petroleum Corporation (NNPC), the Department of Petroleum Resources (DPR), the Petroleum Products Pricing Regulating Agency (PPPRA), the Nigeria Oil Spills Detection and Response Agency (NOSDRA), the Petroleum Equalization Fund (PEF) among others.
The IOCs, who are junior partners with the NNPC in Joint Ventures (JVs) and Production Sharing Contracts (PSC), have already sacked some of their non-technical staff and an industry source told this newspaper on Monday that this had prepared the grounds for the NNPC, which is the “senior partner to do something urgently.”
Checks by New Telegraph revealed that about 160 staff of the Pipelines and Products Marketing Company (PPMC) and the DPR who have been moved to NNPC headquarters in Abuja and DPR office in Lagos are tipped to “be blown away in the first set of the sack gale.”
The handwriting on the wall is becoming more visible for them that “they may be shown the way out soon because most of them have been rendered redundant while the duties of some of them have been taken over by others,” a source at the NNPC said, adding that except a miracle happened 3200 staff including top management staff will be fired before the end of this year.
The NNPC, however, declared that there was no plan to sack any staff.
It quoted the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, to have said at a town hall meeting in Abuja that ‘’as part of the reorganisation programme of the corporation, half of the over 2,200 staff presently at the corporate headquarters would be redeployed to the subsidiaries with a view to making them more effective.’’
Meanwhile, oil and gas workers saw their salaries fall 1.4 per cent over the past year after a sharp decline in oil prices forced their employers to trim costs, but their average global salaries remain high at more than $80,000 a year.
Oil and gas companies are facing a steep decline in revenue because oil prices have declined nearly 75 per cent since the middle of 2014, leading to billions of dollars of budget costs.
As a consequence, those employed in the sector, who were used to rising bonuses and commission pay, saw average salaries decline to around $81,000 a year, according to the annual salary survey published by recruitment firm, Hays.
The percentage of employees receiving bonuses, cited by respondents as the most important factor when considering a new job, fell to 38 per cent from 44 per cent in 2014, the survey showed.
“The ongoing downturn has been reflected in this year’s survey with salaries having declined and 44 per cent of employers conducting restructuring initiatives in order to cut costs, protect profits and ensure their futures,” said John Faraguna, Managing Director of Hays’ oil and gas unit.
As many as 41 per cent of respondents expected salaries to decrease or remain the same this year, the highest percentage in at least six year.
Additionally, 62 per cent of respondents said they expected staffing levels to either decrease or remain the same in 2016, also the highest percentage since at least 2010.
Nevertheless, oil and gas sector salaries remain high.
Those earning most are workers employed in the liquefied natural gas (LNG) sector at an average salary of $233,300, closely followed by geoscientists at $225,600 and petroleum engineers at $210,100, the survey showed.
The oil price dipped below $28 a barrel overnight – as Iranian production is set to enter an oil market already in a global glut. Stock markets across the Gulf tumbled as a reversal in oil price falls now seems further away, despite optimism expressed by the Saudi oil minister.
In the U.S. the price of North Dakota Sour fell below $0 to -$0.50 a barrel at one refinery on Friday.
The Brent dipping below $28 a barrel is the biggest reaction to the lifting of sanctions on Iran
The United Nations’ nuclear agency announced Saturday that Iran had complied with the terms of an international agreement to curb its nuclear development program, allowing sanctions against that country to be lifted. This will allow Iranian banks to reconnect to the Swift system for international financial transactions, allowing capital to flow into – and out of – the country freely. The U.S. did apply new sanctions on Iran on Sunday over its missile program, but they are very limited in the context of the controls that have just been lifted.