North Sea oil platforms will be hit with the first significant strike in a generation, as hundreds of workers protest against cost-cutting in response to lower oil prices.
A 24-hour stoppage is planned for Tuesday by employees of , an oilfield services company, across eight platforms operated by , the Anglo-Dutch energy group.
The dispute is being closely watched as a test of companies’ ability to force through further cuts in labour costs in the face of union resistance as part of their broader .
Union leaders say workers have already made heavy sacrifices since oil prices collapsed from over $100 a barrel in 2014 to a 12-year low of $28 in January. Prices have since bounced back to around $47 a barrel but that has not been enough to lift the gloom hanging over one of the world’s oldest and highest-cost offshore oil-producing basins.
“Strike action by our members is not a decision they take lightly, but they have been pushed to the limit,” said John Boland, regional officer of Unite, which called the strike together with the RMT union.
By the end of this year, the number of oil and gas jobs in the UK is forecast to have fallen by 8,000 from a peak of 41,700 in 2014, according to the industry group Oil & Gas UK. When support jobs are included the number is expected to have fallen from 453,800 to 330,400 — a .
The brunt of the losses has been felt in Aberdeen, capital of the UK oil industry, where the number of people claiming unemployment benefits has more than doubled since the end of 2014.
People still in work have also faced sacrifices. Figures from oilandgaspeople.com, a recruitment site, show that average pay for an offshore worker has fallen from around £80,000 a year in 2014 to £62,000 now. Kevin Forbes, managing director of the site, said: “The industry has been adapting to a ‘lower for longer’ oil price with wage cuts seen by many companies as the quickest way to reduce costs.”
As well as lower pay, workers have also been forced to accept new shift patterns involving longer stretches away from home. Before the price slump, most companies gave workers three weeks off after a two-week stretch offshore. That has now shifted to a two-weeks-on, two-weeks-off pattern.
“The hardest thing is trying to manage things at home, especially for those of us with kids,” said one offshore worker who did not wish to be named. “When it was two weeks offshore, your wife could just about manage. But now it is a long time for her to be looking after the children on her own — especially if something goes wrong during that time.”
The Wood Group dispute shows how the pressure from low prices is being passed down from producers to suppliers to workers. The Aberdeen-based company announced in May that it had won a three-year extension to its contract to provide maintenance services for Shell, which is itself in the midst of a . Terms were not disclosed but the average 3 per cent cut in pay being imposed on about 400 Wood Group employees working for Shell hints at the squeeze being felt all along the supply chain.
Unions say the cuts amount to as much as 30 per cent for some workers when changes to benefits and allowances are included. More than 98 per cent of those voting in the Unite and RMT ballots backed strike action, with a turnout well over 50 per cent.
Dave Stewart, chief executive of Wood Group’s eastern region, said unions had been offered multiple concessions, adding that his priority was “safeguarding long-term employment” for the workforce.
Shell said it hoped that discussions between Wood Group and its employees would continue in search of a resolution before Tuesday’s strike and a series of shorter planned stoppages in weeks ahead. No immediate disruption is expected to Shell’s operations but analysts said delays to essential maintenance could cause problems if the dispute drags on.