Workers on Royal Dutch Shell’s Brent oilfield platforms in the North Sea voted overwhelmingly in favour of strike action over disagreements about the terms of new contracts they are being offered.
Of the 200 workers currently employed by Wood Group and contracted by Shell to conduct maintenance work on their North Sea platforms, 99% voted in favour of strike action, a result that Unite described at “a resounding endorsement.”
The decision is expected to put further strain on an industry already having to work hard to cope with the recent downturn in global oil prices and high production costs.
The head of Shell’s UK and Ireland operations, Paul Goodfellow, said that he was “disappointed that the dispute has reached this stage”. However, he said: “Our top priority is to ensure that the safety of our people and assets will not be compromised during any industrial action.”
Dave Stewart, head of the relevant arm of Wood Group, Wood Group PSN, was equally disappointed. He said: “Reaching a resolution, which meets our mutual goal of safeguarding these jobs in the North Sea now and in the future, remains our commitment and we will continue to engage fully in discussions with our employees and the unions.”
Among the various proposed changes is a 3% average cut to workers’ base salaries, a change that executives deemed necessary in order to maintain profitability of the industry based in the North Sea.
The North Sea is considered one of the world’s most expensive oil basins in terms of production costs and so the recent crash in commodity prices hit companies working there particularly hard. Indeed Oil & Gas UK expect that by the end of this year, some 120,000 jobs will be lost in the UK’s energy sector due to low oil prices alone.
Stewart spoke to the Telegraph earlier in 2016 explaining, as he saw it, the need to cut staff pay in order to keep the domestic industry afloat.
He said: “What we’re trying to do is maintain our steady workforce and also protect jobs in the future. If we keep paying inflated salaries and keep the market hot, costs begin to rise and it’s no good for the industry.”
Over the last few years, he said, almost a third of their workforce had been “working on terms and conditions that were significantly above” industry standards, a programme that is not sustainable with the oil industry struggling as it is.
While Unite praised the workers’ decision, Deirde Michie, head of Oil & Gas UK warned that: “Industrial action can only add to the industry’s challenges as it focuses on tackling the current downturn to restore North Sea competitiveness and sustain jobs in the industry in the longer term.
“The changes we are making now to improve the efficiency of the sector will be critical to shaping the future of the industry and safeguarding the jobs it currently supports.”
