PENGASSAN strike: NNPC laments losses as union halts action

Bashir Ojulari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, has expressed concern over the losses in crude and gas production that resulted from the three-day strike conducted by the Petroleum and Natural Gas Senior Staff Association of Nigeria.

In a correspondence addressed to the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Petroleum Regulatory Commission, Ojulari detailed that the halted strike resulted in a 16 percent reduction in oil production and a 30 percent loss in marketed gas, while the country experienced a 20 percent shortfall in power supply.

Dated 29 September 2025, the letter from the national oil company, titled ‘Impact Assessment of ongoing industrial action,’ was also forwarded to the National Security Adviser and the Director General of the Department of State Services.

The industrial action, which arose from a dispute between the union and the Dangote Refinery, led to the closure of significant oil terminals, gas plants, and power facilities, resulting in the postponement of 283,000 barrels of crude oil production per day and 1.7 billion standard cubic feet of gas daily, thereby disrupting essential income streams from the nation’s two primary revenue sources.

This development occurred as the union's leadership declared the suspension of its nationwide strike against Dangote Petroleum Refinery following the intervention of the Federal Government, while also warning that the ceasefire was temporary and could be revisited if unresolved issues persisted.

Both PENGASSAN and the management of the 650,000 barrel per day refinery have been in conflict.

The dispute originated from PENGASSAN's allegations that the Dangote Refinery had engaged in mass transfers and dismissals of union members, as well as replacing some Nigerian workers with foreign nationals, claims that the company has consistently refuted.

The management of the refinery indicated that the reorganization of the workforce was necessitated by operational needs and was not connected to union activities.

The situation escalated when the union initiated industrial action by ceasing gas and crude oil deliveries to the refinery, raising concerns about possible disruptions to the country's energy supply and economic stability.

In response to worries regarding the implications of the conflict, the Federal Government intervened, highlighting the potential for "negative effects on the economy and energy security," and organized high-level discussions to address the deadlock.

In a letter obtained by our correspondent on Wednesday, the GCEO of NNPCL detailed the financial repercussions, stating that the industrial action led to considerable production delays.

Ojulari revealed that within the initial 24 hours of the strike, as of September 29, 2025, production delays amounted to 283,000 barrels of oil per day, 1.7 billion standard cubic feet of gas per day, and over 1,200 megawatts of power generation.

He noted that this represents approximately 16 percent of the national oil production, 30 percent of marketed gas, and 20 percent of electricity supply, with the effects anticipated to worsen if the situation persists.

"As of September 29, 2025 (within the first 24 hours of the strike), production delays were recorded at around 283 kbpd of oil, 1.7 bscfd of gas, and over 1,200 MW of power generation impact. This corresponds to about 16 percent of national oil output, 30 percent of marketed gas, and 20 percent of electricity generation. If the situation continues, the impacts are expected to escalate, posing a significant threat to national energy security," the GCEO remarked.

The gas sector experienced substantial losses during the strike, with approximately 1.7 billion standard cubic feet per day being taken offline. Industry data indicated that this volume equates to around 1.7 million Mcf of gas daily, which, when converted at 1.037 MMBtu per Mcf, results in approximately 1.76 million MMBtu each day.

Furthermore, he elaborated that at least five scheduled critical maintenance activities have been impacted, with subsequent repercussions likely to exacerbate delays in future periods. These activities include the USAN turnaround maintenance, AKPO GT-3 pigging, H2 well tests, annual compressor maintenance, and SEPNU EAP IGE.

Ojulari also disclosed that around 100,000 barrels per day of crude oil and 1.341 billion standard cubic feet of monetised gas from Joint Venture and Production Sharing Contract assets, which were expected to be restored this week, have now been postponed.

Ojulari pointed out that while a limited number of non-unionised personnel were still facilitating crude exports, operations remained significantly restricted.

He cautioned that ongoing and scheduled lifting operations across the terminals are likely to face additional financial challenges in the upcoming months, increasing the risk of demurrage claims from international buyers.

For example, at the Brass Terminal, the loading of an NNPC cargo that was nearly completed was halted after documentation could not be finalised due to the strike. He noted that this delay has already resulted in demurrage costs.

The NNPCL chief emphasised that the financial impact is escalating rapidly, with considerable revenue losses anticipated at the current levels of deferment.

According to him, missed crude lifting and disrupted gas sales were placing the company’s cash flow under “immediate and compounding pressure.”

“It is our considered view that the current industrial action has impacts that extend beyond the Dangote Refinery. The disruptions pose systemic risks to energy supply, personnel and asset security and the wider economy. A sustainable solution is required to prevent such an extensive interruption of the overall energy security infrastructure and to safeguard national energy security and stability,” he concluded.

Meanwhile, the PENGASSAN leadership explained that the decision to temporarily suspend the nationwide strike was taken out of respect for federal institutions and government mediation efforts, stressing that it was not a show of confidence in Dangote.

Osifo said the union was taking the “moral high ground” by bowing to government persuasion despite strong doubts about the sincerity of the Dangote Group.

During a press conference held in Abuja on Wednesday, Osifo remarked, "We are merely suspending this strike, not terminating it. Should any component of this agreement be violated, we will not issue any prior notice. We will promptly recommence our suspended industrial action."

He emphasized that the industrial action is based on the essential right of workers to freedom of association, asserting that members joined the union "to obtain improved welfare and equitable compensation."

He stated that PENGASSAN is still dissatisfied with certain elements of the communique that was signed under the oversight of the Ministry of Labour, cautioning that the union's patience should not be interpreted as a sign of weakness.

Osifo said, “Yes, we understand that Dangote does not respect the rules of engagement. Yes, we understand that Dangote wants to prove that he is always bigger than the rules and above the law. Yes, we understand that today, we still have some members working within the confines of the refinery.

“Yes, today, we still have some members working in some companies within the group. Yes, we know or we believe or we suspect that some of the things that the government has asked Dangote to do, that he’s going to slip in it and won’t do them just as he did to NUPENG. We have our suspicion.

“We truly don’t believe that he will keep to his own side of the bargain. We truly don’t believe that he will live up to expectations. We don’t believe. But because we have respect for institutions, because we have respect for government, because we have respect for processes, and because we have respect for procedures and because of those in government who sat up till almost 4 a.m. this morning to try and resolve this subject, the NEC has decided to listen to them. Even with our mutual suspicion that Dangote will not do what is right, even with our misgivings that the document did not clearly represent what we have asked for.

“But even with the shortcomings in the document, the National Executive Council of PENGGASAN has decided that they will go ahead to take the moral high ground, that we will go ahead to prove to the government that we are extremely patriotic people, that love this country more than any single individual, that we will go ahead to suspend the industrial action that we started on Sunday, 28th day of September 2025.”

He emphasised that the dispute was about the fundamental right of workers to freedom of association and fair pay.

“Remember, we are only suspending and we didn’t call off. We will be monitoring and following closely on any slip on the part of Dangote. If any part of this agreement, or any part of this communique as put up by the Ministry of Labour, is broken, we will not give any notice, we will not give any warning, and we will resume the suspended industrial action immediately.

“We have only suspended the industrial action in respect of the government of the land. As an institution, are we completely happy with what was provided? The answer for us is no,” he noted.

Osifo further dismissed claims that the uni