Oil price: cuts could spark first walkouts 'in a generation'

Britain's North Sea oil production could be hit by the first mass worker walkouts for close to 30 years, paralysing the industry as anger grows at cost cuts introduced in response to plunging oil prices.  


The Times reports [1] that union bosses are to begin counting votes following a ballot on strike action among helicopter pilots, "who play a critical role ferrying workers and supplies to offshore rigs". While this would be disruptive in itself, it could also prove to be a precursor to more widespread withdrawal of labour by the sector's 10,000 rig workers, after union members rejected a revised package of cost-saving measures that would extend on-rig periods to facilitate job cuts.


That would be the first mass action since the 1988 Piper Alpha fire, "when sit-ins were held amid calls for improved safety measures", and the first action in the wider UK oil sector since the disputes that closed the Grangemouth refinery in Edinburgh in 2013.


Rig workers "typically work for 14 days straight on an offshore rig before being permitted a 21-day break", but are being asked to "switch to working 21 days followed by a 21-day break", to allow oil producers to cut costs in response to the low oil price by reducing "the number of separate crews required to operate a rig from three to two".


Job cuts are already happening in the North Sea. Shell has confirmed that it cut 500 jobs this year and the BBC reports that Wood Group, which services rigs for many of the larger oil companies, revealed in its latest results a reduction of 1,000 roles.


It comes at a time when the global oil price, which stood at $115 in early summer last year, remains rooted below $50 a barrel and likely to fall further. Brent crude was down 0.55 per cent on Tuesday afternoon to $48.55.


Source: The Week.co.uk


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