The Nigerian National Petroleum Company Limited (NNPC Ltd) announced on Tuesday that the ongoing conflict between Dangote Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has caused major disturbances within Nigeria’s energy industry.
In a formal communication dated 29 September, addressed to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPC highlighted that the strike action has led to considerable delays in production schedules.
Despite government interventions aimed at resolving the dispute, tensions between the refinery and the labor unions have escalated, as reported by PREMIUM TIMES.
The letter, titled “Impact Assessment of ongoing industrial action,” was signed by NNPC’s Group Chief Executive Officer, Bashir Ojulari, and also forwarded to the National Security Adviser (NSA) and the Director General of the Department of State Services.
“We wish to bring to your attention the consequences of the current standoff between Dangote Refinery and PENGASSAN, particularly following the union’s directive for members to cease work starting 28 September 2025,” the letter stated.
“Given NNPC Limited’s responsibilities to oversee Joint Venture assets, act as the concessionaire in Production Sharing Contracts (PSC) on behalf of the federation, and function as the supplier of last resort to protect national energy security, it is crucial to update you on the observed effects and potential risks if this impasse continues,” the document added.
Consequences of the Strike
As of 29 September, within the first day of the strike, NNPC reported production shortfalls of roughly 283,000 barrels of oil per day (kbopd), 1.7 billion standard cubic feet per day (bscfd) of gas, and a reduction exceeding 1,200 megawatts (MW) in power generation.
These figures represent approximately 16% of Nigeria’s total oil production, 30% of marketed gas, and 20% of the nation’s electricity output.
“If the strike persists, these impacts are expected to worsen, posing a significant threat to the country’s energy stability,” NNPC warned.
The company further explained that union members have restricted access to most office premises, allowing only personnel in medical, security, and fire safety roles to enter.
“NNPC and its partners have activated their Business Continuity Plans (BCP) to maintain field operations where feasible, with office staff instructed to work remotely. Non-union employees have been deployed to sustain field activities at several sites, although disruptions remain widespread,” the statement noted.
The withdrawal of services is causing either complete shutdowns or reduced output across multiple oil fields.
“Approximately 100 kbopd of oil and 1.341 bscfd of monetized gas production from Joint Ventures and PSCs, which were scheduled for restoration this week, have been delayed. The Bonga FPSO (PSC) is currently offline, deferring 120,000 barrels per day,” the letter detailed.
Additionally, the Oben gas plant, Afam 6 power station, and Okpai power plant have been shut down due to union activities, resulting in a combined deferment of about 400 million standard cubic feet per day (mmscfd) of domestic gas, 18,000 barrels of oil per day, and a loss of over 1,200 MW of electricity from Afam, Okpai, Egbin, Azura, and Transcorp Power plants.
Beyond the Oben gas plant shutdown, further interruptions have been reported in the midstream sector.
Shell Nigeria Gas (SNG) is currently deferring 50 mmscfd of domestic gas, impacting customers in the Agbara Ota industrial area.
There have also been repeated attempts to disrupt the NNPC Gas Infrastructure Company (NGIC) Escravos-Lagos Pipeline System (ELPS) and OB3 networks, including efforts to halt operations at the Warri Gas Treatment Plant, OML 34, and the Oghara pigging station.
“If the ELPS pipeline becomes non-operational, over 1,300 mmscfd of domestic gas supply would be jeopardized, threatening the industrial activities in Lagos,” the letter warned.
“Earlier union plans to reduce feed gas to the Nigeria LNG (NLNG) facility were averted through constructive dialogue. While operations remain stable, the restart of Train 5 and Train 6 following Turn Around Maintenance (TAM) has been delayed, affecting the recovery of over 1 bscfd of gas,” it added.
NNPC noted that a limited number of non-union staff are currently managing export operations, but logistical challenges are apparent.
Ongoing and scheduled cargo liftings at terminals are expected to face delays, potentially resulting in demurrage charges.
Loading of cargo destined for Dangote Refinery is currently suspended pending clearance, with negotiations underway to facilitate vessel clearance and haulage arrangements.
At the Ugo-Ocha Terminal, clearance for shuttle vessels to dock and conduct Ship-to-Ship (STS) operations has been withheld, halting injections to the terminal and potentially deferring 45,000 barrels per day starting from the evening of 29 September.
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“Loading operations are similarly delayed, awaiting the presence of NUPRC non-union staff to facilitate exports. A near-completed NNPC cargo loading was postponed due to documentation issues caused by union actions, leading to demurrage expenses,” the letter explained.
Five critical scheduled activities are expected to be affected during this period, with cascading effects causing further delays in subsequent operations. These include the USAN TAM, AKPO GT-3 pigging, H2 Well Tests, annual compressor maintenance, and SEPNU EAP IGE projects.
NNPC emphasized that these delays will push back key project timelines, hindering production growth targets.
Projected revenue losses at current deferment levels are substantial, driven by missed liftings and reduced gas sales.
The company highlighted that cash flow challenges are immediate and worsening.
NNPC continues to engage with operating partners and stakeholders to strengthen security measures and emergency responses, while activating Business Continuity Plans that rely on non-union personnel to maintain operations where possible.
“We believe the ongoing industrial action’s repercussions extend well beyond Dangote Refinery, posing systemic risks to energy supply, personnel safety, asset security, and the broader economy,” the letter concluded.
“A durable resolution is essential to prevent widespread disruption of the national energy infrastructure and to protect Nigeria’s energy security and economic stability.”