Update on crisis in the offshore oil and gas industry

Circular No: NP/083/16


HO ref: S2/6

8th March 2016

Dear Colleagues

Update on crisis in the offshore oil and gas industry

Further to circular no.056/16 of 10th February 2016, offshore employers continue to exploit the extremely low oil price to cut staff, employment rights and terms and conditions. The estimate of job losses has recently been revised, with over 75,000 jobs in the industry and across the supply chain believed to have been lost in the UK Continental Shelf since late 2014.

Following the raft of detrimental contractual changes imposed by employers with no consultation with workers or their unions, RMT has been active in Westminster and Holyrood to raise the impact of the offshore crisis on jobs and skills. Briefings, questions and motions have been regularly circulated to MPs and MSPs to demonstrate the effect of oil and gas companies North Sea policies on the workforce, including on offshore supply vessels.

We have repeatedly made the point to the UK and Scottish Governments that improved respect for employment rights, better industrial relations and protecting the skills base is essential if the ‘maximising economic recovery’ policy is to benefit the national economy and not just multi-national energy companies and their shareholders.

Through our seat on the Scottish Government’s Energy Jobs Taskforce, RMT has consistently called for measures to reduce the impact on workers and their families of the savage cuts across the offshore oil and gas industry. It is essential that these key skills are not lost and that offshore workers made redundant are not thrown on the scrap heap. We welcomed the Scottish Government’s announcement of a £12m programme for offshore workers to be re-employed in manufacturing and engineering but more must be done, across the UK to find decent jobs for offshore and supply chain workers who are the real victims of this crisis.

The UK Government’s Energy Bill is going through Parliament and this will have a significant impact on the ability of any Government to regulate and control the commercial activities of oil and gas companies and their contractors in the North Sea. We are working with the RMT Parliamentary Group on amendments to the Bill that will require the commercial regulator, the Oil and Gas Authority (OGA) to take action against companies that enforce policies which effect employment conditions, skills and the long term sustainability of the industry, including areas such as decommissioning and Carbon Capture and Storage.

We have also briefed cross-party committees of the UK and Scottish Parliaments on the safety as well as economic impact of the current crisis. The imposition of the 3-weeks on 3-weeks off shift pattern, unprecedented on production platforms and the growing backlog of safety critical maintenance work are serious steps backward in the safety culture offshore which had previously been guided by the post-Piper Alpha principle of ‘continuous improvement’ as recommended by Lord Cullen.

The union has also given written and oral evidence to cross party committees in the UK and Scottish Parliaments. In the case of the Economy, Energy & Tourism Committee of the Scottish Parliament, RMT’s evidence informed the MSPs’ report (published 18th January 2016) which contained the following recommendations:

•    The industry and the trade unions continue to work ever more closely together in order to ensure that the objective of maximising economic recovery of oil and gas from the UKCS is fulfilled prior to the inevitable decommissioning phase of its life.

•    Improve safety reporting systems offshore and greater recognition of the key role of Elected Safety Representatives in such improvement.

•    The UK regulator (Maritime & Coastguard Agency) respond to trade union concerns over health and safety and sub-National Minimum Wage pay rates on flag of convenience vessels.

RMT will follow up these and other recommendations, as well as continuing to campaign politically and industrially against the sort of outrageous attacks we have seen, particularly over the last fifteen months. It is unacceptable that such a critically important industry should be left to the vagaries of the free market with declining regulatory oversight. With over 20 billion barrels of oil still under the North Sea, the offshore oil and gas industry still has much to offer UK offshore workers of today and tomorrow and it would be a scandal if we did not become world leaders in decommissioning and other emerging offshore technologies.  

I would appreciate it if you could bring this circular to the attention of all Branch members and you will be kept updated with further developments.

Yours sincerely
Mick Cash
General Secretary