Cablegate: Follow-Up On April 2003 Transocean Hostage Taking

This record is a partial extract of the original cable. The full text of the original cable is not available.

271535Z Aug 03




E.O. 12958: N/A

REF: A. LAGOS 1088
B. ABUJA 813
C. ABUJA 810
D. ABUJA 807
E. ABUJA 806
F. ABUJA 768

1.(SBU) During an early August visit to Port Harcourt,
Corporate Responsibility Officer (CRO) met with Russel
Pousson, Manager for Operations of Transocean Sedco Forex,
the Houston-based oil service company whose four off-shore
rigs where the target of an April 2003 hostage-taking by
members of the National Union of Petroleum and Natural Gas
Workers (NUPENG), Nigeria's union of blue-collar oil and gas
workers. That siege, which held 96 expatriate oil workers
(including 17 AMCITS) hostage for 15 days, ended after
Ambassador Jeter appealed to President Obasanjo and the
President of the Nigerian Labor Congress, who interceded with
NUPENG's national leadership and facilitated a negotiated end
to the standoff. (Note: As reftels report, the actions of
the local Transocean chapter of NUPENG were not condoned by
NUPENG's national leadership, which led to a division that
persists through ongoing negotiations with Transocean's
management. End Note)

2.(SBU) According to Pousson, none of the 350 NUPENG workers
employed by Transocean has been allowed back on the rigs.
Non-union laborers obtained from a Nigerian contractor are
manning the rigs, all of which are in full operation. 88
NUPENG members were fired in late April for participating in
the hostage-taking, which Transocean (and the rest of the
oil/gas community) views as a criminal act. Their salaries
have stopped and, according to Pousson, many have come in to
Transocean's Port Harcourt office to collect their severance
pay, which is viewed as acceptance of their termination. The
remaining 240 or so NUPENG members employed by Transocean are
sitting at home, collecting base salary -- as required by
NUPENG's collective bargaining agreement with Transocean --
but none of the supplemental allowances such as housing,
travel, rig premium pay, etc. (Note: The Nigerian government
taxes only base salary, therefore the typical compensation
plan for a Nigerian worker includes myriad supplemental
allowances that together account for the majority of the
compensation. End Note)


3. (SBU) The Lagos-based Managing Director of Transocean's
Nigeria operations, Ian Clark, continues meetings with
NUPENG's national management in an attempt to reach a
settlement allowing the NUPENG workers back to work on the
rigs, according to Pousson. The lack of a settlement,
however, has not affected the company adversely he, insisted.
NUPENG workers will only be allowed back to work when they
agree to abide by a new "code of conduct" being developed by
MD Clark and which will cover criminal acts such as the
hostage-taking. Even when the code of conduct is accepted,
NUPENG workers will be phased in gradually and will not be
allowed in such large groups on individual rigs as existed
before. "We learned our lesson," noted Pousson, who
explained that the NUPENG workers onboard the Transocean rigs
in April greatly outnumbered the expatriates staff, which was

4. (SBU) CRO asked if Transocean was still vulnerable to
additional work action from NUPENG. The Operations Manager
insisted that NUPENG has lost its battle with Transocean and,
with its Transocean members fired or on effective furlough,
is now incapable of affecting Transocean operations. "We
broke their back," concluded Pousson. The Transocean
official noted that the all other operating or oil service
companies have been watching Transocean's experience with
NUPENG with great attention and full support for the company.


5. (SBU) Pousson noted that the hostage taking started out of
NUPENG members' anger over Transocean management's decision
to fire five senior NUPENG members for allegedly defrauding
Transocean through false expense claims. The NUPENG workers
publicly cited their demand for transportation to/from the
deep-water off-shore rigs via helicopter, as the expatriate
oil workers are transported, vice the slow supply boats. The
Transocean manager stated that this was a weak case on which
to hang NUPENG's justification for the hostage-taking, noting
that other companies follow the same practice as it is
impractical to change large crews (50 or more) via
helicopters that hold six to eight passengers. More to the
point, claimed Pousson, transportation for the change of
crews is not the responsibility of the oil service company
(e.g. Transocean) but rather is provided by the Operating
Company owning the field being drilled or pumped, such as
Shell, ChevronTexaco or Agip.
6. (SBU) While refusing to disclose the salaries paid to
Transocean's Nigerian workers, Pousson claimed that
Transocean's compensation is "70 percent" higher than the
industry average and "30 percent" higher than its next
closest competitor. If the high salaries paid to Nigerian
staff were to "get out" in the public, NUPENG would lose a
lot of sympathy, opined the Transocean manager.


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