Industrial Action is Not the Answer to North Sea Crisis

Industrial action is not the answer to the difficulties the North Sea oil and gas industry is facing, Deirdre Michie, chief executive of the UK offshore oil and gas industry association Oil & Gas UK, said.

Labor unions Unite and RMT are striking due to proposed cutbacks from Wood Group, which include reducing workers’ pay and allowances (such as sick pay, life insurance and travel rates) by up to 30 percent, according to an RMT document.

“It is really important that all parties keep talking to resolve this dispute as soon as possible,” Michie told Rigzone.

“The North Sea still has decades left but only if we can restore competitiveness and secure investment. This must surely be the focus of everyone – onshore and offshore – working in our sector,” she added.

In July, Unite and RMT revealed that a large portion of Wood Group employees working across Shell operated assets in the North Sea supported industrial action over the disputes.

The first 24-hour strike took place July 26 and involved around 400 workers from both unions. A second 48-hour strike occurred Aug. 4, which disrupted planned shutdowns on the Brent Charlie, Shearwater and Nelson platforms in the North Sea. Several more strikes are also being planned by the unions in the near future, although these are currently suspended to allow for fresh talks.

John Boland

Regional Officer, Unite

“There are already further stoppages that have been notified to Wood Group for the coming weeks,” Unite Regional Officer John Boland told Rigzone.

“We would hope that Wood Group would get into meaningful negotiations with us so that further strike action is not necessary,” he added.

Many Workers Will Still Be Paid Above OPA Threshold

Wood Group’s proposals have already affected moral among workers, leading to increased levels of stress among staff in the North Sea, Unite’s Boland said.

Responding to these claims, Wood Group defended its position and emphasized that many workers would still be paid above thresholds already agreed by unions.

“None of our employees are being offered terms and conditions below the Offshore Partnership Agreement, agreed by the unions only this year; nor will they be. The majority of our employees will still be paid significantly above these terms and conditions,” Dave Stewart, CEO for Wood Group’s eastern region business unit, said in a statement sent to Rigzone.

“Around a third of those involved will experience no reduction to their base salary,” he added.

In a show of support for Wood Group’s proposed cuts, Oil & Gas UK told Rigzone that the deal didn’t include anything that hadn’t already been signed off previously.

“Companies have to adapt to survive this really difficult business climate and the changes made in this context are still within the agreement negotiated by the unions,” Oil & Gas UK’s Michie said.

RMT has however opposed this idea, telling Rigzone that it is not in fact a member of the Offshore Partnership Agreement and that it has never signed off on anything previously in regards to this matter. 

Wood Group Remains ‘Wholly Focused’ on Resolving Dispute

Fifteen new cases of industrial action from Unite and RMT union members were tabled to take place on North Sea platforms including Curlew, Brent Alpha, Brent Charlie, Nelson, Gannet and Shearwater from Aug. 15 to Sept. 3. If the latest round of talks, announced Aug. 11, prove to be unsuccessful, it is assumed that these strikes will continue as originally planned.

Dave Stewart

CEO, Eastern Region Business Unit - Wood Group

“The reason for this new set of industrial action is that despite us offering to meet at any time, Wood Group have made no attempt set up any meetings to resolve this dispute,” Unite’s Boland told Rigzone on Aug. 9, shortly after the new strike dates were released.

Following the announcement of additional strikes, Wood Group’s Stewart expressed his dismay but vowed to solve the disagreement.

“We believe the escalation of industrial action is extremely unhelpful towards reaching a resolution and we are bitterly disappointed and frustrated that this decision has been taken,” Stewart said. 

“We remain wholly focused on resolving this matter. The mutual goal shared by us, our employees and the unions is safeguarding jobs in this challenging economic climate,” he added.

Stewart has tried to encourage union members to work with the company in order to find a resolution, emphasizing in the process that cuts are an important step if the groups want to sustain the mature North Sea oil and gas industry, and its associated employment opportunities, long into the future.

“There is a responsibility on all of us in this industry to create a competitive cost base in line with the Oil and Gas Authority’s strategy for maximizing economic recovery. Wood Group’s focus does not change. We remain committed to continuing to engage openly with our employees and the unions to reach a resolution,” Stewart said.