Stop North Sea race to the bottom

The North Sea oil workforce suffered another blow this week (May 25) after Shell announced it would cut 475 jobs in the UK and Ireland.

The latest announcement is part of a wider raft of Shell job losses worldwide, totalling more than 2,000.

In the last two years alone, Shell has now shed in total more than 1,000 jobs in the UK and Ireland, in what it says is a response to the downturn in the price of oil.

The latest jobs cull also comes in the wake of the oil giant’s £36bn merger with oil and gas exploration group BG.

Shell vice president for UK and Ireland Paul Goodfellow blamed the price of oil for the job cuts, saying that market conditions “remained challenging” and that the company had to operate in an environment in which oil prices would be “lower for longer”.

But Unite has hit out against this logic, arguing that the cuts are instead part of oil companies’ race to the bottom on terms and conditions which will decimate the viability of the North Sea oil industry in the future.

“Unite does not accept that the job losses reported are a direct consequence of market conditions,” said Unite’s John Boland. “There is a real attempt to use this as an opportunity to cut jobs and attack workers’ pay and working conditions.

“We will not allow this attempt at smoke and mirrors to detract from what is, in actual fact, a race to the bottom on costs, but with the added risk of another health and safety catastrophe,” he added.

“We have very real fears that Shell cannot continue to operate safely offshore if it keep shedding the workers tasked with ensuring our oil industry is safe and sustainable.”

Shell’s job losses are only the tip of the iceberg – the North Sea workforce has been decimated over the last year, with 150 jobs going every day since the downturn in the price of oil, bringing the total number of offshore job losses to an astounding 65,000.

Summit call

The latest announcement from Shell further underscores Unite’s call for the governments in Edinburgh and at Westminster to do more to save this vital industry beginning by convening a cross-sector oil and gas summit to plan for the industry’s survival and growth.

As UNITElive reported earlier this year, Unite, joined the RMT, the GMB, Balpa, and Nautilus in a Scottish TUC-coordinated press conference to speak as one voice representing hundreds of thousands of oil workers.

“The Oil and Gas Confederation (OGC), of which we are members, has called time and again for an oil and gas sector summit to be convened urgently,” Boland noted.

“So far the call has fallen on deaf ears but both the Scottish and Westminster governments must wake up to what is happening to this vital sector,” he added. “They cannot stand-by while a vital industry’s demise takes place on their watch.”

Skills drain

Unite has criticised the offshore oil and gas companies for using the downturn to impose of regressive working practices across the North Sea. The industry moved quickly to cut pay and holiday entitlement with proper consultation following a sharp drop in the price of oil.

“Oil companies must drop the attrition strategy – stop cutting jobs and attacking workers’ terms and conditions,” Boland added. “It is time to take stock because this industry is heading to a situation whereby it will have lost the very skilled and experienced workers it will need to deal with the upturn.

Boland’s point was also made earlier this year by industry certification body DNV GL, which in its annual report, warned against short-term, knee-jerk cuts.

“As an industry, we have taken quick, cost-cutting action, which has been particularly apparent through a raft of major job cuts over the past 12 months, and further short-term measures are expected, despite concerns over the skills drain,” said DNV GL oil and gas regional director for the UK Hari Vamadevan upon the release of the report.

Unite regional officer Tommy Campbell concurred.

“The skills drain is a huge concern,” he said. “I work with scaffolders and they’re certified to work specifically in oil and gas. When they lose their jobs, maybe they’ll find work on the mainland and eventually their certification runs out. They may never return, and with them will go all those valuable skills that the industry needs.”