Exclusively For Offshore Post: Declan is an internationally recognised journalist of more than two decades, having worked for the BBC and ABC News, focusing on all things business and global economics.

Declan Curry

North Sea Strikes; A Failure Of Leadership

Published at 09:17AM - 26/07/16

Today sees a most unusual type of strike. There is no picket line. There are no flags; no placards. No requests to honk your horn if you support the workers. After all, you don’t get many passing motorists when you’re taking industrial action on a North Sea oil platform.

In fact, you don’t get many strikes in the North Sea – full stop. Today’s dispute involving members of the RMT and Unite trade unions working for the Wood Group on Shell platforms is the first such dispute in Britain’s offshore oil and gas industry in almost a generation.

As some Offshore Post readers have commented on our Facebook page, it’s a rum time to stage a strike. The oil price has collapsed. Oil majors have cut their spending by billions of pounds. Hundreds of thousands of jobs have been axed around the globe. 

Trying To Survive

Companies up and down the offshore supply chain have had to slash the cost of doing business, just to survive. And even though we’re in the third year of low oil prices, there is still fresh pain. Only last week Schlumberger confirmed it had laid off another 16,000 workers from its payroll so far this year. With so many unemployed oil workers, it’s perhaps unsurprising that a few of them are sharply critical of those who still have a job but are refusing to work, even if only for a day. 

The strike may ignore basic economics. It may be futile. Worst of all it may even be counter-productive, making companies think twice about future North Sea exploration or production. But it has a point. 

Shell's Mighty Brent Oil Field In Production
Shell’s Mighty Brent Oil Field In Production

It is a cry of agony and rage from workers who have already suffered much. They are saying – enough. 

Not everyone in the industry supports the strikers. I suspect there will also be limited sympathy for them from the car driving, oil consuming public. They saw some oil industry workers earn king’s ransoms during the boom years. 

$140 A Barrel Of Oil

Oil industry executives remember those days too; the days when contractors made lucrative livings from majors that clamoured for more of everything, yesterday. The oil giants could ignore the cost when oil was $140 a barrel and the priority was to pump as much as possible; they will now keep the lid screwed down on costs even if oil prices revive, to stop bad habits returning. 

But if – as the trade unions claim – over half the workers who could have voted on industrial action did so, and of that relatively high turnout over 90 percent voted to strike, there is clearly a strong sense of grievance, felt keenly. And that poses a major challenge for senior executives in the offshore industry, in the North Sea and globally. 

An Expensive North Sea

Even after years of cost reductions, the North Sea remains one of the most expensive places on earth to find and extract oil. It is obvious that it must continue to develop new ways of working. It must deploy people, equipment and capital more effectively. It must maximise the potential of technology and big data. It must think more creatively about the entire length of the supply chain, and the full life of the field. Everyone who knows the North Sea, knows this. 

Transocean Spitsbergen Bunkering & Loading Cargo
Transocean Spitsbergen Bunkering & Loading Cargo In North Sea

But outside the cosy management meetings in warm, dry rooms, the buzzwords like cooperation and collaboration have other starker, colder meanings. They mean longer shifts, thinner pay packets, fewer people. 

The Leadership Challenge

Good managers recognise fears, address them, help people understand the broader context and encourage them to join the journey to a more sustainable future. If oil company executives cannot – in the teeth of this crisis – help their workers and contractors see that this pain is essential for the industry’s very survival, then they have failed in the essentials of leadership.

The North Sea is the oil industry’s global laboratory for smarter working. It is developing best practice and innovative processes that can be applied elsewhere in the world. Malaysia’s oil giant Petronas – as just one example – is already using the lessons learned by companies operating the UK Continental Shelf for its own Asian efficiency programme. But the most effective changes are those which workers feel they own and shape, not ones which are imposed. Communication, clarity and empowerment are essential – not just to avoid industrial discontent, but to secure the full benefits of smarter working. 

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