Prelude to restart following worker strike action

Shell

AFTER 76 days of strike action, oil major Shell and workers’ unions have come to an agreement that will allow production to restart at the company’s huge floating liquid natural gas (FLNG) facility Prelude.

News of the agreement – between Shell and the Australian Workers’ Union (AWU) and the Electrical Trades Union – came on 24 August.

Offshore Alliance, which includes the AWU, said that negotiations for a new agreement began in 2020, but that Shell had “dragged its heels” throughout the process. It adds that the company was forced to reach an agreement after the strike action led to a shut down in mid-July and prevented major planned maintenance work. It estimates the strike action cost the oil major A$1.5bn (US$1bn) in lost production.

The Alliance said that the agreement has secured members a range of benefits, including salary increases of between A$30,000–50,000, improved rostering, and new security and career progression provisions. It highlighted that job security had been a major “sticking point” in negotiations with Shell. The facility owner has now agreed that if it increases contractor or labour hire workers on Prelude, it will not reduce the number of direct employees covered by the agreement as a consequence.

A Shell spokesperson said: “We are now focused on moving forward as a business, returning to safe, stable production, and delivering affordable, reliable energy to our customers to meet the critical demands on energy security.

“With industrial action lifted, we have commenced the process to prepare for a hydrocarbon restart. We will work methodically through the stages in this process with safety and stability foremost in mind.”

According to The Australian, as of 24 August, Shell expected to complete lifting work bans “shortly”, allowing restart of production. 

Shell did not disclose when restart is expected.

Daniel Walton, AWU National Secretary and Offshore Alliance spokesperson, said: “I know our members are keen to get back to work as usual – more secure in their jobs – and able to help Shell Prelude be as successful as it can be.

“We look forward to a productive and constructive relationship with Shell management from here.”

The proposed agreement will cover about 230 people employed by Shell on Prelude, the vast majority of whom are Alliance members. Offshore Alliance is yet to vote on the in-principle agreement, but it is encouraging members to vote in favour. The ballot will be open from 3–6 September.