Bass Strait 0il strikes cost BHP, Exxon another month
BHP Billiton and ExxonMobil have lost another month of oil production as strike action continued into April.
BHP Billiton and ExxonMobil have lost another month of oil production at their Bass Strait oil and gas fields as strike action estimated to have cut more than $US120 million off March quarter revenue continued into April.
The Australian understands the pair’s Longford crude oil plant, closed for 45 days in the March quarter, was unable to open until April 29, indicating BHP will take another hit to quarterly production when it releases its next production report in July.
The strikes, which prevented the crude plant and a gas plant reopening last quarter after planned maintenance shutdowns, concern enterprise agreements for onshore and offshore workers.
The Bass Strait fields have been the nation’s biggest oil-producing fields over the past 40 years, hitting their heyday in the 1980s. While crude production has fallen substantially since then, the fields are still producing and are set to expand gas production.
BHP referred questions on the matter to Exxon’s local unit, Esso Australia, which operates the pair’s 50-50 Gippsland Basin Joint Venture.
“We are committed to enabling change in order to enhance productivity and ensure a safe and sustainable future for our employees and the business,” an Esso spokesman said.
“While disappointed with the industrial action, we will continue in our attempts to reach a resolution.”
The unions that have taken protected industrial action are the Australian Workers’ Union, the Australian Manufacturing Workers’ Union and the Electrical Trade Union.
The strikes ended after court action by Esso and Qenos, a major Bass Strait customer, banned some actions. These bans have now ended.
“The unions are considering their options in terms of further industrial action,” the AWU’s Victorian vice-president Ben Davis said.
“Bartering is going nowhere fast — we’ve been negotiating for nine months but Esso needs to compromise if we are going to resolve the disputes.”
Mr Davis said any future action would not have the same impact as the previous strikes, now that the plants had restarted, but that it would still affect output.
The pair are due back in front of the Fair Work Commission tomorrow for conciliation, Mr Davis said.
The continued industrial action comes as the nation’s oil and gas heavyweights meet this week for the annual Australian Petroleum Production and Exploration Association conference, which is being held in Melbourne this year.
BHP’s Houston-based head of oil and gas, Tim Cutt, will speak in the opening session of the conference this morning.
The disputes with the union are over Esso trying to change offshore oil platform workers’ longstanding one-week-on, one-week-off shifts to two-weeks-on, two-weeks-off, and over staffing numbers at the onshore Longford gas and crude oil plants near Sale.
The strikes were first revealed by BHP last month in its March quarter production report, which showed production slumped by 50 per cent because of 45 days of lost production.
BHP said its share of crude oil and condensate production from the fields slumped from 2.28 million barrels of oil in the December quarter to 1.16 million barrels in the three months to March 31. Gas production was not noticeably affected because it happened in the lower-demand summer months.
Quarterly Bass Strait oil production has not been so low this century and probably not since the big oilfields started flowing in the late 60s. Doubling the 1.12 million barrel slump to account for Exxon’s share gives lost production of 2.24 million barrels. At average $US55 oil prices for the March quarter, this represents $US123m of lost revenue.
At that rate of production, the 29 days of lost production in April represents another 720,000 barrels of lost crude oil, worth $US44m of lost revenue.
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