Nigeria LNG’s shipping unit to slash salaries, may reduce staff
Nigeria LNG, operator of the giant Bonny export plant, said it will reduce salaries and review manning levels at its shipping unit due to the ongoing LNG shipping industry downturn.
Nigeria LNG can confirm that “reviewed manning levels and wage scale for officers on Bonny Gas Transport (BGT) vessels will become effective on 1st September 2016,” the LNG operator said in a statement issued on Wednesday.
“This action is in line with the depressed global market situation, and consistent with prevailing industry rates – and has been taken in the interest of the sustainability of the business,” the statement said.
According to local media reports, the salaries could by reduced by 50 percent.
“In reality the reviewed wage scale cannot be said to be a salary reduction as claimed. The fact is that company has simply adjusted and aligned wages with internationally obtainable benchmarks. For example, our Nigerian officers’ dollar denominated wages upon conversion at existing rates far exceed wages for their peers who are paid in naira,” NLNG said in the statement.
According to NLNG, this decision has been taken in response to a more than 60% reduction in company revenues and global oil price, which have dropped from $140 to about $40 per barrel.
Nigeria LNG posted a 36.6% drop in its revenue in 2015 due to declining oil and gas prices. NLNG earned $6.84 billion in 2015, as compared to $10.8 billion in the year before, its annual report showed.
“Several BGT vessels have already been laid up while many more areas of reduction are being explored. This is consistent with the national oil company guideline for relevant industry operators to reduce OPEX costs by 40%,” the statement reads.
These actions are also taken to “minimise need for staff layoffs or retrenchment”, as has been the case in several companies in the industry in response to the steep decline in revenue, according to NLNG.
“Other conditions of service of all NLNG Ship Management Limited (NSML) personnel including leave days will remain the same. Leave emoluments also earned in line with current wage scales will be unaffected.” the LNG operator said.
NLNG’ Management has already communicated these developments to staff and “shall continue to engage them during the implementation process and appeals for the continuing understanding and cooperation of all parties.”
NLNG is a joint venture compromised of Nigerian National Petroleum Corporation, NNPC (49%), Shell (25.6%), Total (15%), and Eni (10.4%).