Oil giant BP has become the latest North Sea company to make cost-cutting moves in the tougher financial environment.
Jake Molloy, regional organiser for the RMT union in Aberdeen, said yesterday that several hundred people employed offshore by contractors such as Wood Group, Salamis and Cape would see cuts in their pay packages by between 10% and 20% from October 1. BP says it is targeting areas such as automatic night-shift payments to reduce costs.
Mr Molloy added: “The guys were told the news yesterday and there is a lot of anger. It’s through their efforts that the oil companies produce record profits year-on-year, but they have to pick up the tab when things are not so good and the oil companies want to cut costs.
“It’s unfair and unjust.
“This is a short-term approach by BP. It is likely to have an impact on the performance and productivity of the offshore workforce.”
A spokeswoman for BP said: “We regularly discuss ideas for performance improvement with our contractors and suppliers.
“We will honour the Offshore Contractors’ Association wage agreement to ensure sustainable wage levels, however, over the years, we have paid discretionary payments such as built-in overtime to the day rate and automatic night-shift payments. These changes will simply mean that we pay for overtime and night shifts on an ‘as worked’ basis, rather than incorporating it as an automatic payment.
“This will increase transparency and consistency across our contractor workforce. BP is committed to sustaining investment and activity levels in our North Sea business by improving efficiency and reducing costs.”
The Press and Journal reported in February that BP was asking its contractors and suppliers in its North Sea business to work with it to identify ways to reduce costs and improve efficiency after being hit by lower crude prices.
The company had not identified at that time any specific level of reduction in costs being sought, however, or an exact timeframe for these reductions to come into effect.
The spokeswoman said in February that, since 2004, the company’s costs had risen by 50%, but the oil price had returned to the level of five years previously.
The market has rallied since then, but is still just half the price of the highs seen last summer.