Festus Osifo, PENGASSAN President
By Elegbede Abiodun
• … cautions against workers redundancy.
“If this is allowed to sit through the way it is today, in the next few months, our members are in danger of being declared redundant because the company may not be able to meet their obligations,” he said.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has urged President Bola Tinubu to rescind the recent Executive Order mandating the direct transfer of oil and gas revenues into the Federation Account, warning that the move could threaten about 4,000 jobs and unsettle the sector.
Addressing journalists in Lagos, PENGASSAN President, Festus Osifo, argued that the directive undermines provisions of the Petroleum Industry Act, which was enacted in 2021 to overhaul and stabilise the industry.
He questioned the signal being sent to investors.
“What are we telling the investors? What are we telling the international community? That just with an executive order, you can set aside the law of the land? This is an aberration. This should never have happened. The actual percentage that gets there eventually is somewhere below two percent and the 30 percent Frontier Exploration Fund does not go directly to NNPC Limited but into a designated Frontier Exploration Account. Some provisions in the EO did not tell the entire truth.”
Osifo clarified that statutory royalties are paid into government coffers rather than to regulators personally. He cautioned that if the order remains in force, workers could soon face redundancy.
“If this is allowed to sit through the way it is today, in the next few months, our members are in danger of being declared redundant because the company may not be able to meet their obligations,” he said.
Recalling the prolonged efforts that led to the passage of the PIA, Osifo said the legislation was meant to restore predictability after years of dwindling investment.
“We had to believe that with that piece of legislation, there would be some level of certainty in the industry. The people who are coming to invest will know what the rules of engagement are. If you don’t stabilise your own environment, the investors will take their money elsewhere.”
He stressed the centrality of oil and gas to the national economy.
“Our major revenue earner as a country is oil and gas. The more money we earn from the industry, the more we can defend our naira. If production is impacted and foreign exchange earnings reduce, it will affect our exchange rate, and once the exchange rate is impacted, it will affect our pockets.”
Describing the sector as highly capital intensive, Osifo noted that some drilling rigs cost up to 1.5 million dollars per day.
“It is not a one-dollar business. It is a multi-billion-dollar industry. That is why we must not allow investors to flee.”
He added that the union had expected a formal amendment bill rather than an executive order.
“The information at our disposal was that there was going to be a bill. But instead of a bill, it came as an executive order. We were not carried along in any way,” he said.
