Loading delays on ExxonMobil’s crude exports, which included Qua Iboe and Erha, impinged on demand as buyers worried about demurrage costs.
However no fresh trading has been reported despite some cargoes loading Jan. 15-20 being available for purchase.
The bulk of the delays were because of strikes this last month over layoffs by oil companies, traders said.
Workers of ExxonMobil had gone on strike because the management of the company had planned to retire some of them with very fat severance packages ranging between N140 to N300 million but some of the workers are resisting the deal which they described in-appropriate because of the time of its implementation.
But the company had said last year was a particularly challenging year for the Oil and Gas industry in general and for Mobil Producing Nigeria, in particular.
The profitability of this ExxonMobil affiliate has been the worst in recent history. While costs are down, revenue is down by almost three quarter, even while the company has spent more than its earnings to see that its contractors and employees are paid.
Some of the resultant effects on their business have included scaled down operations, reduced personnel, uplift project deferments and contract renegotiations.
Against this backdrop, any responsible company would take steps to ensure survival. This redundancy program affecting lower performing can only be one of the steps towards survival.
Reliable sources within the company revealed that the employees impacted are only about 6% of the workforce, and were offered an enhanced benefits package in excess of the provisions of the Collective Bargaining Agreement (CBA) signed with the in-house Union. Post-employment support programs to support their transition period from the Company were also included in the package.
The pay package covered redundancy pay of about 36 months basic salary, Settling-in allowance of up to 2 months basic salary, additional pay to address economic realities of up to 3 months basic salary, and Notice pay of 3 months basic salary.
Oil futures were on track for their biggest annual gains since 2009 despite intraday losses, aided by OPEC’s agreement to cut production from early next year.
Still, demand for West African crude in spot trading was limited by holidays across Europe and uncertain demand in Asia. Gains in U.S. crude stocks showed by the U.S. Energy Information Administration this week also raised doubts over western demand for African oil in the near term.
Olusola Bello With Agency Report
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