Nigeria's oil workers' unions decided to suspend their 2 month old strike Sept. 4, prompting a return to work by most field personnel.
Members of the two main oil workers' unions walked off their jobs July 4 after Nigeria's military government jailed opposition leader Moshood Abiola on charges of treason (OGJ, July 11, Newsletter).
Recent reports confirmed that the strike crumbled in the face of government's tough stance.
Military ruler Gen. Sani Abachi likely speeded the process by sacking union leaders and ordering oil workers back to work. He also reportedly fired the head of Nigerian National Petroleum Corp.
A spokesman for the white collar Pengassan union was quoted as saying it and the blue collar Nupeng union decided to halt the strike "in the interest of the suffering masses of Nigeria, the economy, and the oil industry."
SHELL OPERATIONS
Shell Petroleum Development Co. of Nigeria Ltd. said Sept. 7 that virtually all staff had returned to work in eastern and western Nigerian producing areas and in Lagos.
A Shell official said workers were checking the condition of oil field equipment before resuming production from wells that had been shut in.
Shell's gross output of almost 1 million b/d was cut in half toward the end of the strike. Production was said to be increasing once more, although figures will not be available for some time.
Oil loading was under way at Shell's Bonny and Forcados terminals, but a declaration of 7 days' force majeure was still in place at Forcados. Forcados loadings were being rescheduled Sept. 7, after which the force majeure will be allowed to lapse.
A sabotaged manifold at Bonny terminal had prevented deliveries of Bonny medium crude oil, although small volumes of the oil produced once more.
PRICE RESPONSE
Brent crude oil for October delivery hardly changed in price on news of the strike suspension. Brent crude was trading at $16.34/bbl at close of business Sept. 6, having spent much of the previous week in the $16-16.50/bbl range.
Geoff Pyne, oil market analyst at UBS Securities, London, said earlier effects of the strike on oil prices had been due to expectation of delays in exports. There had been normal stock-building in August, so he expected the effect on the market to be negligible.
Pyne expects Nigeria to begin producing "flat out" at about 2.1 million b/d in the fourth quarter to make up for lost revenues.
"Nigeria will feel entitled to produce its missing barrels," he said.
"The consensus is that the market will be quite tight in the fourth quarter, with high oil prices.
"However, we feel the market won't be as tight as people expect. We predict average prices to be just over $17/bbl in the fourth quarter."
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