Wood Group agrees North Sea compromise

A worker looks out onto the weather deck of the Armada gas condensate platform, operated by BG Group Plc, in the North Sea, off the coast of Aberdeen, U.K., on Thursday, Dec. 10, 2015. Royal Dutch Shell Plc got clearance from antitrust authorities in China for the takeover of BG Group Plc, removing the final regulatory hurdle for its biggest-ever deal. Photographer: Simon Dawson/Bloomberg©Bloomberg

A labour dispute involving workers on Royal Dutch Shell platforms in the North Sea has moved closer to resolution after Wood Group, the oil services provider, reached provisional agreement with unions on a compromise deal.

Maintenance workers employed by Wood Group held a series of stoppages on Shell platforms over the summer in the first significant strike by North Sea workers for almost 30 years.


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The dispute, over pay and conditions, highlighted rising labour tensions in the UK offshore energy industry as companies look for cost savings in the face of protractedly low oil and gas prices.

Wood Group said on Tuesday it had drawn up a “mutually agreeable proposal” with union representatives that was in “the best interests of all parties”. The deal would be put to a ballot of members by the Unite and RMT unions next week, it added.

The dispute has been closely watched as a test of the industry’s ability to reduce labour costs in the North Sea, as well as unions’ appetite to resist cuts.

A spokesman for Unite said the deal was “the best that can be achieved in the current circumstances”. Neither side would reveal details of the agreement.

Wood Group employees working on Shell platforms had faced an average 3 per cent pay cut under original proposals that prompted the dispute. Unions claimed that some people would see earnings fall by 30 per cent when benefits were included.

“The new proposal recognises the skills, flexibility and capabilities of the incumbent offshore workforce, the challenges facing the industry and demonstrates collective leadership in shaping the future of the North Sea,” said Wood Group in a statement.

Paul Goodfellow, head of UK upstream operations for Shell, said: “Shell is pleased with this proposal and looks forward to working with Wood Group, Unite and the RMT to ensure that the North Sea remains competitive.”

Industry leaders say changes in working practices are unavoidable if the North Sea basin is to survive in an era of low oil prices and declining production. Unions say workers are being asked to bear a disproportionate share of the pain.

By the end of this year, the number of oil and gas jobs in the UK is forecast to have fallen 8,000 from its 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 loss of more than 120,000.

The brunt of the decline has been felt in Aberdeen, capital of the UK oil industry and home of Wood Group. Figures from, a recruitment site, show that average pay for an offshore worker has fallen from about £80,000 a year in 2014 to £62,000.

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