Shell Hopes for Solution to 'Counterproductive' Strike

Anglo-Dutch major Shell said that the unions' strike planned to hit the maintenance programme on seven of its offshore platforms was counterproductive but it hoped a solution might yet be reached.

An overwhelming majority of Unite and RMT members last week voted to strike in opposition to cuts in their terms and conditions, amounting in some cases to 30%, imposed by the contractor, Wood Group. The first day of action is planned for July 26.

“This action is highly regrettable. Shell’s priority is to ensure the safety of our workforce and assets and we will not compromise on safety during this period of industrial action," it said in a statement July 25. “While we recognise the right of Wood Group’s employees to strike, it is clear that in order for the North Sea oil and gas industry to remain competitive in the lower oil price environment, structural change is needed.

"We hope that Wood Group’s employees and management will continue working towards reaching a solution which will halt this counter-productive industrial action.”  

Wood Group said: "Although we are extremely disappointed that industrial action will be taken, we respect the right of those employees who choose to do so. Our firm focus remains on reaching a resolution, which meets our mutual goal of sustaining these jobs for our employees in the North Sea now and in the future, against the backdrop of an extremely challenging climate created by the sustained low oil price."

Wood Group's founder, Ian Wood, was commissioned by the government a few years ago to report on the state of the North Sea as a hydrocarbons province and to recommend measures the government might take to prolong its life. Since then the collapse in oil prices has threatened to shorten it still further by squeezing margins until they vanish or go negative in many fields.

Speaking to The Times July 25, the CEO of major commodities trader Vitol, Ian Taylor, said it was 'game over' for the North Sea, even without collapsing pay. "The big boys are not going there because there is nothing large enough left. The smaller companies can't get any capital." He said the oversupply of oil could continue for another couple of years, as there was no sign of any major demand growth.

William Powell