Leadership1 publisher3 min readPublished
Apache's 4% pay offer brings a North Sea strike threat to the Forties pipeline
Unite says more than 160 Apache offshore workers on the Forties and Beryl fields could strike later this month over a 4% pay offer. The union warns of severe harm to UK fuel supply, a claim Apache answers by comparing any pipeline pressure drop to routine maintenance.
The Board Room · Leadership desk
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What happened
- Apache says it will keep experienced personnel on key sites and does not expect other producers using Forties to be affected.
- Apache calls its final offer fair and says the raise matches the one given to its non-unionised employees earlier this year.
- Unite says Apache set back-pay deadlines and indicated payments could be withheld, leaving workers potentially thousands of pounds out of pocket.
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Why it matters
- contradiction A pipeline shutdown and a maintenance-scale pressure dip cannot both describe the same strike, and Ineos, which runs Forties, is the party placed to say which is closer.
- constraint By tying the 4% to non-union pay, Apache makes any higher settlement a figure its non-union staff can cite in their own next pay round.
- precedent The last Unite offshore dispute, at Neo Next, ended in a deal days before its strike dates, so announced action is no guarantee of a walkout at Apache.
- exposure Any Forties disruption would reach fuel buyers while G7 governments are already releasing emergency stocks, leaving less reserve for a second supply shock.
Unite's fuel warning depends on a sequence of steps, and each step is the union's own claim. Workers walk out [3], the Charlie platform stops [16], and the Forties pipeline system goes down with it [17]. Stevie Davies, a Unite industrial officer, said any disruption to Apache's platforms "would have a direct hit on the Forties pipeline and potentially severely affect the UK's fuel supplies" [18].
Apache disputes the last step. It says any drop in pipeline pressure from industrial action would be similar to a routine maintenance outage [7]. "As a responsible operator, we are planning to maintain safe operations throughout any industrial action," the company said [8]. Ineos, which operates the Forties system and is the party best placed to judge between the two accounts, was contacted for comment [10].
A skeptic would ask how more than 160 people could stop a pipeline said to carry almost a third of the UK's oil and gas [17]. Unite's answer is in the job titles. The workers include electrical experts, production technicians and radio operators [3], and the union says their absence could bring Charlie to a standstill [16]. Apache's reply is that it can keep experienced personnel of its own on key sites [7].
Apache's position on pay rests on comparison. It offered 4% to staff it says are among the UK's highest earners, on an offshore rota averaging 153 working days a year [2], and it says the raise matches what non-unionised employees received earlier this year [6]. Unite says the offer is a real-terms cut for many staff [1], though the report does not give the inflation figure the union is measuring against. APA Corporation, Apache's Texas parent, made $1.4bn after tax on $9.2bn of revenue last year [5], a margin of about 15% [14]. Sharon Graham, Unite's general secretary, said: "We will not tolerate unacceptable pay offers." [4]
The link to non-union pay is the trade-off Apache has chosen. Holding at 4% keeps one rate across both workforces this quarter. Raising it to end the dispute would give non-union employees a higher number to point to at their next review.
This summer's Neo Next dispute is the nearest guide to how this ends. Unite called off strikes there after a deal it said lifted the pay package by more than 4,000 pounds, reached days before action was due to begin on 22 July [9]. The Apache action has no fixed date in the record beyond "later this month" [3].
For a fuel buyer, the strike is a risk for this month sitting on top of a larger one. UK diesel averaged a record 2 pounds a litre on Friday [11], with the war on Iran already disrupting Gulf supplies [13], and G7 leaders plan to release up to 100m barrels of emergency diesel and crude after Donald Trump threatened to cut off US diesel supplies [12]. I think the strike matters to buyers mostly through that backdrop. Even the maintenance-scale dip Apache describes would arrive while governments are drawing on reserves. The choice this quarter is between paying for cover against a strike that may settle late, as Neo Next's did, and carrying the exposure if Unite's account of the pipeline proves right.
What to watch
- Whether Ineos, the Forties operator, says how a stoppage on the Charlie platform would affect throughput for other producers.
- Whether Unite names strike dates and whether Apache moves off 4% before them, as Neo Next settled ahead of its 22 July dates.
- Whether Apache's back-pay deadlines pass with payments withheld, which would harden the dispute on both sides.