Dangote refinery strike cuts Nigeria oil output by 600,000 barrels
Business Operations
Nigeria’s Oil Production Disruption
Nigeria experienced a production loss of over 600,000 barrels of oil due to a three-day nationwide strike prompted by mass layoffs at the Dangote refinery. This was confirmed by the Nigerian National Petroleum Company (NNPC).
Production Impact
According to NNPC’s upstream chief, Bayo Ojulari, the strike by the nation’s main oil union significantly hindered production capabilities, resulting in a deferred output of approximately 200,000 barrels per day during the strike period.
Union and Management Dispute
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) initiated the strike to protest the dismissal of approximately 800 refinery employees. The union argues that the dismissals were retaliatory actions against unionizing efforts, while Dangote Industries asserts that these were part of a restructuring strategy and accused the dismissed employees of engaging in sabotage.
Regional Supply Concerns
The Dangote refinery, a critical supplier for both Nigeria and several neighbouring countries, faced operational challenges due to the strike. This disruption posed a risk of tightening fuel supplies domestically and throughout the region.
Sector Recovery Challenges
The strike occurred at a time when Nigeria’s oil sector was beginning to recover. Prior to the strike, the average output in September was 1.68 million barrels per day, representing an increase from August. The oil ministry reported an increase in active drilling rigs from 31 in January to 50 by July. Additionally, Nigeria produced 7 billion cubic feet of gas daily in the previous month.
