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Oil Workers' Union Challenging Chevron's Sale of Assets in Nigeria

09-26-2008

A Nigerian oil union said it will resist Chevron Corp.'s sale of its fuel-marketing business in the west African nation, deepening a labor dispute.

Union members of the Petroleum and Natural Gas Senior Staff Association of Nigeria have been on strike at Chevron's downstream headquarters in Lagos for about two weeks. The industrial action has not affected production from oil and gas fields.

Chevron, the second-largest U.S. oil company, announced on Sept. 19 it had agreed to sell Chevron Oil Nigeria Plc to Corlay Global SA, a Panamanian company owned by MRS Holdings Ltd. and Petrochi Holdings, for an undisclosed sum. The subsidiary operates a fuel retail business in Nigeria under the Texaco brand.

``We still have labor-related issues outstanding, and until we settle that they can't sell,'' Babatunde Ogun, president of the union also known as Pengassan, said by phone in Lagos today. ``Whoever is buying is on his own.''

Lloyd Avram, a Chevron spokesman at the company's San Ramon, California headquarters, said that ``negotiations are ongoing'' in an e-mail sent late yesterday, and declined to comment further on the dispute.

Pengassan wants Chevron to compensate workers in the marketing company with 30 percent of the proceeds of the sale of its 60 percent majority stake. The workers are currently on strike to press their demands, Ogun said.

Zenon Petroleum and Gas Ltd, a Nigerian company that holds a minority stake in Chevron Oil Nigeria, is also challenging Chevron's divestment plans in court. The case is scheduled to continue at a federal high court in Lagos, Nigeria's commercial capital, tomorrow.

The sale is in line with Chevron's efforts to realign the company's downstream operations and won't affect its upstream investment oil and gas production in Nigeria, the U.S. company said when it announced the sale.

Chevron later announced, on Sept. 22, that it would sell also subsidiaries in Benin, Cameroon, Congo, Ivory Coast and Togo.