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2019: A Year in Review for the Oil and Gas Industry

December 18, 2019

This was a busy year, with EBA wins at Viva Geelong, where AWU operators secured a 9.5% pay rise over four years.

At Monadelphous, a protracted negotiation lead to the first industrial action on an offshore platform for decades. The Offshore Alliance – a partnership between our union and the MUA – conducted a strategic industry bargaining campaign that saw a handful of union members grow to 100 per cent Union membership. The campaign delivered an agreement with pay rises of 26% and also converts casuals to permanent employees.

This comes at a time when casualisation is an increasing problem across many sectors, and we hope the oil and gas industry takes note of what we’ve achieved.

AWU National Secretary Daniel Walton could not have said it better: “This is one of the biggest Australian union wins of the century.”

The agreement is a significant victory for the Offshore Alliance. The Alliance is going from strength to strength and is fighting back against multinational oil and gas companies, standing proud, strong and pushing back to improve working conditions, wages, job security and health and safety standards.

In other EBA news, at Diamond Offshore, our delegates successfully blocked the unacceptable 2018 DOGC Enterprise Agreement, defended the appeal filed by DOGC of the above decision, and blocked a 10% pay cut to employee salaries due to take effect in July 2018. The pay cut was reduced to 7.5% and only took effect in June 2019. AWU delegates also ran a very successful ‘no’ campaign to an inferior EBA offer from DOGC in June 2019, with a 97% no vote coupled with a high turnout.

At Sodexo Remote Sites, AWU delegates successfully blocked the 2017 Offshore Operations EBA. We also successfully blocked 2018 Offshore Operations EBA after being dismissed by the FWC.

At DRILLING INDUSTRIES AUSTRALIA, we successfully opposed approval of the DIA EBA 2019, which was dismissed by the FWC.

Over at MAS, we successfully opposed the approval of MAS Projects Agreement 2019. MAS withdrew after the AWU intervention.

At RESOURCE PEOPLE (AGC), members ran a very successful ‘no’ campaign alongside the ETU, AMWU, CFMEU in response to the inferior offer from Resource People.

Bass Strait – uncertainty ahead

The Bass Strait fields may be ageing, but analysts say it could still prove profitable to a new operator. Exxon is looking to sell its 50 per cent share and is looking to sell for a price tag of around $3 billion.

The Bass Strait operations include platforms in Gippsland, Offshore, Longford and Long Island. BHP Group owns the other 50 per cent in the field.

We will be sending you regular updates on this, but for now, work carries on as normal.

In other news from the Bass Strait:

Over at ESSO Bass Strait, the EBA stalemate continues. Despite a very well-publicised win, when the FWC rejected ESSO’s application to terminate our agreement, ESSO went ahead and appealed, and we are now waiting on that outcome. Negotiations have now tipped past the five-year mark.

We had hoped that ESSO would respect the FWC ruling but are not surprised given the length of this fight. The FWC had said terminating the agreement would give ESSO an unfair advantage over our members and only strengthen ESSO’s bargaining position. We will continue to update you once we get news of the appeal.

At Longford, mammoth negotiations did come to an end in July this year, after 742 days of industrial action. The dispute started when ESSO tried to force workers to sign onto a new contract which slashed wages and conditions. Delegates and workers were able to negotiate a new agreement. Whilst the details are confidential, Victoria Branch Secretary Ben Davis said he was satisfied members had got the best deal possible in the circumstances.

And lastly, new offshore EBA negotiations will begin in the New Year.

ESSO Longford members on the line


Fuel Security

The giant for-sale sign at Bass Strait should be another red flag to the Abbott-Turnbull-Morrison Government over Australia’s fuel security crisis. The potential take over of Caltex – without guarantees about the critical refinery – is yet more proof that our leaders don’t understand the crisis we are in.

Australia has the lowest fuel reserves of any member nation of the International Energy Agency, and over the last financial year had an average of just 23 consumption days of petroleum in storage, 20 days worth of diesel, and 25 days of aviation fuel. This is dangerously low.

The recent Saudi oil crisis highlights Australia’s exposure to global energy shocks and the need to overhaul shipping, refining, and storage capacity. Put simply, Australia needs more refining and storage capacity.

The AWU continues to pressure the Government to expand existing refineries and build new ones. We are also calling on an urgent need for greater investment in shipping and storage capacity, so we can return our country’s supplies to a safe level. It will not only provide Australia with fuel security, but it will create thousands of new jobs.

BP Kwinana – the fight continues

AWU operators have not had a pay rise for 2 years and have been fighting BP in the FWC for 18 months .

Just this month, AWU members and BP had yet another meeting, with BP proposing a third party draft the EBA. We have significant concerns over this process. A third party would mean there would be no ownership from either BP or members, and we will be pushing ahead to conduct our own negotiations to ensure a fair, reasonable offer for AWU members.

BP has said it is happy to carry on negotiating and talks will begin in the new year.  We are hopeful for a positive outcome, and I’d like to personally acknowledge the incredible work of the AWU delegates at this site. Clive Hacking, Troy Irwin and Troy Steward have fought tirelessly for their members, and deserve to be congratulated for their efforts.

AWU West Australian Secretary, Brad Gandy, Clive Hacking, Troy Irwin and Troy Stewart from BP Kwinana, QLD Industrial Advocate Aaron Santelises, AROC Delegates, and Marsden Point Delegates at the Marsden Oil Refinery.


Protecting Your Safety Standards

Earlier this year, the Oil & Gas IRG launched its Exposure Standards Matter campaign, which seeks to ensure that current exposure standards remain as mandatory and are not downgraded.

This is ongoing and in 2020 we will continue to make government submissions and our IRG members will assist the national office when needed. To find out more and to sign our petition, click here.

A spotlight on Curtis Island LNG 

Next year will be pivotal for negotiating new contracts at Shell QGC. Currently Shell QGC workers have a baseline agreement that does not contain most of the terms and conditions afforded under individual workers’ contracts, but the Shell takeover and fear of losing jobs meant this important issue was not raised. Next year it’s a different story when the agreement reaches its nominal expiry date – we will be fighting hard.

Santos Cooper Basin

At Santos, SA branch senior site Convenor Luis Orgaz led negotiations for six months that resulted in the rolling over an outstanding onshore gas agreement with improved conditions and a pay increase of 3% each year. This agreement was another example of what members can do when they are all in the Union and work together.

Job opportunities calling

There are some huge projects that have either just come online will start production in the next five years. This is particularly true in the area of liquified natural gas (LNG), with Western Australia becoming a global LNG hub. The Browse development looks likely to start up in 2023 with a total investment of $15 billion.

Also in 2023, Pluto LNG will add another LNG liquefaction train at a cost of $5 billion. Australia is now the world’s leading exporter of LNG, and the latest government figures show it has a major role to play in reducing global greenhouse emissions by replacing coal consumption.

Having said that, we think its critical that Australia reserves enough gas for its own usage. We will continue to make sure that Australians get a fair share of their own gas – after all, it belongs to all of us.

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