Fears over hundreds of jobs and pensions were stoked last night (March 16), as it unexpectedly emerged that oil giant BP has been in talks with the petrochemicals firm Ineos – a company with a history of anti-union actions – to sell a major North Sea pipeline.
The Forties Pipeline System (FPS) now owned by BP is made up of roughly 100 miles of pipeline and is one of the most important strategic pieces of infrastructure in the North Sea. It carries nearly half a million barrels of oil each day, which amounts to 40 per cent of UK oil production, from 80 different oil fields. At maximum capacity it can bring 1m barrels of oil ashore.
BP employs around 300 staff to operate and support the pipeline system and Unite fears for their future under a potential transfer to Ineos, which owns a major UK refinery in Grangemouth and whose aggressive profit-seeking at the expensive of the workforce under the leadership of boss Jim Ratcliffe came to a head in a 2013 dispute involving Unite.
The bitter dispute saw hundreds of Grangemouth workers, Unite members, forced to accept worse wages, pensions and terms and conditions after Ratcliffe threatened workers – and the Scottish economy – with permanent closure of the plant. The dispute came only five years after an earlier pitched battle between Ineos and workers over changes to their final salary pension scheme in 2008.
Responding to the news Unite general secretary Len McCluskey called for an urgent government inquiry into the ownership of critical industrial resources.
“This sale concerns us all,” McCluskey said. “With the possible purchase of the Forties field by Jim Ratcliffe’s Ineos, the extraction and processing of a precious commodity could soon be controlled by one individual.
“The most important route for oil out of the North Sea and onto UK shores is now about to pass into the hands of one man.
“No matter who that individual is, the potential for power to be exercised without social responsibility is clearly there. That is not something any responsible government should find acceptable.
“Unite is calling upon the governments at both Westminster and Holyrood to state that they will look into the ramifications of this sale.
‘Immediate full inquiry’
“We need an immediate, full inquiry to ensure that the correct checks and balances are securely in place.
“Furthermore, the case for the state to have a stake in vital resources like the supply of oil and gas has never been stronger. The principle must be that these commodities being sustained in the public interest, not for private profit.”
Unite Scottish secretary Pat Rafferty agreeing, echoed the union’s major concerns.
“Our members at BP will have major concerns about the possibility of becoming employees of Ineos, a company with a clear history of attacking our members’ pensions, as well as their terms and conditions, in order to maximise profit,” he said. “If a sale does go ahead, we will fight to protect our members in every way we can, and Ineos should work with us to allay their fears.”
The news that Ineos may takeover BP’s Forties Pipeline System comes on the same day (March 17) that a new book will be launched chronicling the 2013 Ineos dispute.
Published in association with Unite and written by then-Grangemouth convenor Mark Lyon, the book, The Battle of Grangemouth: A Worker’s Story, tells of how Ratcliffe conducted a relentless campaign against union members in a modern-day fable of the failures of contemporary approaches to running the economy.
Unite believes that its publication serves as a timely reminder of the dangers workers face as economic power becomes concentrated into the hands of the few – or in this case, in the hands of one man.
“The Forties Pipeline System carries a massive amount of the UK’s oil,” Rafferty explained. “Grangemouth is the one of the country’s major refineries. Both of these pieces of vital national infrastructure could soon be effectively in the hands of one man. That is an incredible amount of power.”
Like “giving a monkey a machete”
One oil industry source told the Daily Record yesterday (March 16) that Ratcliffe taking over the Forties pipeline would be like “giving a monkey a machete”.
“Letting Jim Ratcliffe loose on all the operators who feed into that pipeline is a dangerous, dangerous ploy,” he explained.
“He could at a stroke just cull that whole region with ownership of that pipeline by increasing tariffs. Oil operators pay tariffs to put their product into the pipeline.
“If he were to start messing companies about with increased tariffs and everything else it could make their operations uneconomical.”
The potential sale can also be seen as another blow to the UK oil industry, which has shed hundreds of thousands of jobs after the price of oil plummeted in 2015. BP selling the FPS would be the latest in a growing trend of oil majors withdrawing from North Sea assets.
A government source speaking to the Daily Record sought to quell fears over the Ineos takeover, saying that the UK government could intervene if major national infrastructure like the FPS were at risk.
“The UK Oil and Gas Authority issue permits to operate the pipeline infrastructure and operators in the North Sea are obliged to comply with their policy of ‘maximum economic recovery’,” the source said. “If they do not the Authority can stop the permit and re-issue it to another operator.”
But Unite’s Pat Rafferty said that there were still questions to answer, and he called on both UK and Scottish governments to take action.
“It’s not so long ago that both Grangemouth and the Forties pipeline were owned by all of us, and operated by a nationalised British Petroleum with a responsibility to look at what was good for the country as a whole, not just what was good for a small group of wealthy individuals,” he said.
“We need a national debate now,” Rafferty added. “Do our politicians believe in an economy where power is widely held and used for the benefit of us all, or are they happy with power in the hands of a tiny minority whose biggest concern is their own personal benefit?
“Is it right, or sensible, to give the power to turn off the taps – and bring the entire country to a standstill – to one private company, without any democratic involvement or oversight?
“Unite doesn’t believe that is good for workers or good for the country. Our members will be listening closely to the views of our governments both at Westminster and Holyrood.”
- Find out more about the new book, Battle of Grangemouth: A Worker’s Story, and how you can get a copy here. Unite members can receive a special discount by entering the code UNITE17 — proceeds will go to the Trussell Trust food bank network.