GMB & Unite Shop Stewards say poor planning & mismanagement to blame for Petrofac cost overruns on Laggan Tormore Shetland gas plant

Petrofac management grossly underestimated the vast numbers of skilled workers needed to construct such a large complex, high level of specification gas plant in such testing weather conditions says GMB and Unite site shop stewards

GMB and Unite shop stewards committee responded to the press release issued by Petrofac on Laggan-Tormore Project in the Shetland Islands. See notes to editors for copy of press release by Petrofac on April 20th 2015.

The statement says "We as democratically elected union shop stewards representing GMB and Unite members working at the Shetland Gas Plant (SGP) project for Petrofac and their sub-contracting companies and agencies working under the Shetland Island Agreement (SIA), could not let Petrofac’s press release (20/04/15) go unanswered.

We believe this to be in parts an outrageous attack on the workers constructing this highly technical gas plant and the perception we take from the press release is that all the financial losses that Petrofac have incurred have been the fault of the workers, truly unbelievable. It mentions in press release "Continued adverse weather conditions during March on Shetland…", this is the Shetland Islands there are adverse weather conditions all year round, didn’t Petrofac study the historical weather data of the Shetland Islands, the Shetland weather seems to come as a surprise to the Petrofac management. Also the press release goes on to mention that "industrial action has delayed this ramp up by almost a month from our original expectations", could Petrofac be more specific and state exactly what industrial action this was which caused a month’s delay, because we are at a loss as to what industrial action took place. Also the use of the phase "ramp up" does this relate to labour/manpower? If it does, why was it the case at the end of last year (2014) that Petrofac and their sub-contractors/agencies made hundreds upon hundreds of engineering construction workers redundant at SGP?

The Petrofac press release also states the following "..it has become apparent that we will need to expend significantly more man-hours to complete the project than anticipated as a result of low manpower productivity levels as the project nears completion..". We would say this is because from day one the Petrofac management have grossly underestimated the vast numbers of skilled workers needed to construct such a large complex, high level of specification gas plant in such testing weather conditions.

The facts speak for themselves, the Sella Ness workers accommodation camp near the SGP was built to house approximately 850 workers (albeit sharing rooms in the 21st century) there has constantly been double or even treble that number of workers on the SGP project. So where have these 100s upon 100s of workers been accommodated?

Petrofac have had to hire and lease the following floatel barges, hotels and cruise ships such the Bibby Stockholm, Kalmar, Bibby Challenger, Lerwick Hotel, Shetland Hotel, Gemini, SNAV Toscana, Ocean Endeavour, Sans Vitesse and Regina. Then on top of this Petrofac have had to hire/lease dozens of 52 seater coaches to transport the 100s of construction workers the round trip of about 60 miles a day to the SGP project. The aforementioned have been in place now for approximately 2 years, so the cost of the accommodation and transport must have cost the SGP project millions upon millions of pounds. Why wasn’t this mentioned in Petrofac’s press release?

Petrofac management have fully managed the SGP project from day one, as they have wanted to manage it, some people might say not very well though, because there has been a constant changing of the supervision and management from the beginning, with the view from a large majority of the workers that a number of the supervision/management have not been earning their £100s a day pay based on their knowledge and skills of constructing a gas plant, but rather on who they know.

Group Chief Executive Ayman Asfari was quoted as saying in the Petrofac press release the following "Our lack of experience of operating a direct construction model in a wholly new geography for our Onshore Engineering & Construction (OEC) business, particularly in a location where labour costs are much higher and productivity much lower than we are used to, has cost us dearly." We as shop stewards can only reply to this in saying that Unite and GMB members whether employed by Petrofac or their sub-contractors/agencies at SGP are willing and contractual obligated to do a job of work that is put in front of them from the start of their shift to the finish of the shift, 7 days a week, 365 days of the year and that is what they will do if they are given a job of work to do in a safe manner and that is up to Petrofac to manage that process, which they are sometimes not very good at doing to say the least.

Also on finishing we can only say that that in regards to high labour costs and low productivity, which we totally refuted, we are employed under the Shetland Island Agreement as union members of independently recognised trade unions, which is compatible to the terms of the International Labour Organisation (ILO) which is a United Nations agency dealing with labour issues, particularly international labour standards, social protection, and work opportunities for all.

Could this be said of the places of work regards the rest of Petrofac’s EPC project portfolio around the world? Where Petrofac state in their press release that they "… typically use sub-contractors to deliver construction services…"

GMB and Unite shop stewards committee: Shetland Island Agreement (SIA) Shetland Gas Plant (SGP) 27/04/15.

Source: www.youroilandgasnews.com

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