Nearly 400 members of Unite and RMT unions working for Wood Group across eight Shell oil and gas platforms in the North Sea have gone on strike today.
The strike is the first in 28 years and is over a dispute over 30% pay cuts and changes to allowances, says the Unite and RMT unions.
Today's strike is the first 24-hour stoppage. It will be followed by a series of other stoppages over the following weeks.
The decision to strike followed a 99.1% vote in favor of strike action by a majority of Unite members, and a 98.5% vote in favor of strike action by a majority of RMT members.
The move comes as the industry has had to make cuts amid a fall in the oil price from a US$110/bbl high in 2014, to below $40/bbl earlier this year.
According to analysts Wood Mackenzie, operators have managed "dramatically tighter cash flow management." According to the firm's analysis, 56 oil firms will achieve cash flow neutrality at an average price of around $50/bbl. "This is some achievement given the majority needed over $90/bbl in 2014," says Tom Ellacott, senior VP of corporate research at Wood Mackenzie. However, it's been at the expense of deep cuts in capital investment, which will damage growth prospects, says Wood Mackenzie.
Speaking ahead of today's industrial action, a Shell spokesman said: “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.
“While we recognize 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.”
The unions say, in addition to a 30% pay cut, recent changes have also seen workers move from a two-week working cycle to a three-week working cycle, which means working extra weeks offshore for the same salary, the union said.
John Boland Unite regional officer said: “To say we are disappointed it has had to come to this is an understatement, but bosses at Wood Group are simply not listening. This dispute is the first in the North Sea in three decades and shows the strength of feeling of our members who feel backed into a corner and left with no other option but to use their industrial strength to make Wood Group listen.
“Our members have been faced with changes to shift patterns which have seen them working longer offshore for the same pay and as well as having three rounds of redundancies imposed on them. This attack on their pay and allowances has pushed our members too far this time."
The Shell Brent field. Photo from Shell.
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