Shell Shuts Down Production At Prelude FLNG


A recent news article published in the Riviera states that Prelude FLNG stoppage may continue for months; Shell hits record profits.

Shell’s operations in Australia

In the ongoing dispute between Shell’s operations in Australia and joint workers’ union representatives the Offshore Alliance, Shell has cancelled a previously announced lock-out directed at striking workers.

The reason given by Shell for the cancellation is safety. A Shell representative said pay for workers still doing partial work under the industrial action conditions on board Prelude would “continue to be prorated”, reversing the prior decision to cut all workers’ pay and undertake a lock-out at the facility.

“Shell remains committed to reaching an agreement and working together to find a way forward with our workforce,” the oil major said.

From background information provided by Shell, the company’s position appears to be that work bans would have to be stopped and operations resumed before Shell will revisit negotiations.

Shell have also claimed unions had highlighted the possibility that, under a lock-out, safety critical work and emergency response activities would no longer be covered.

The Offshore Alliance

The Offshore Alliance disputed Shell’s characterisation of events, saying Shell had not spoken to the union regarding the lock-out nor what protections union workers would provide under a lock-out scenario, with regard to safety and emergency response.

“The union and our members will always do everything within our capacity to ensure workers are not exposed to serious and imminent OHS risks. It is highly offensive for Peter Norman to suggest otherwise,” the Offshore Alliance wrote in a Facebook post.

“What [Shell Asset Manager for Prelude FLNG] Peter Norman should have said is that Shell had acted on incompetent advice about how to deal with this bargaining dispute and had once again over-reached. [Shell’s] doubling down of threats will simply strenghten our resolve to go one day longer and one day stronger than the likes of Peter Norman, to sort out the Prelude FLNG [bargaining agreement].”

Shell threatens to cancel schedule

The Offshore Alliance claimed Shell has “threatened” to cancel a scheduled maintenance and inspection turnaround at Prelude in September and October, with a large number of dedicated crew who had previously committed to work on the scheduled turnaround shutdown of Prelude advising the union they are actively sourcing other work.

The Offshore Alliance claimed Shell is “rapidly heading for US$1Bn of lost production” at Prelude due to strike action.

UK-headquartered Shell has subsequently announced another successive quarterly profit record of more than US$11Bn for Q2 2022, with the supermajor citing high oil prices, tripled refining profits and strong gas trading among factors in its outsized earnings.

Shell’s profits have more than doubled each quarter for the last three quarters, a period of turmoil for fossil fuel flows as Russia’s attack on Ukraine resulted in financial proxy wars targeting energy flows that have included international sanctions and import and supply cuts.

Shell has also faced protests from consumers angered by the company’s profits during a time when consumer finances are being hit by high prices attributed to geopolitical events.

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Source: Riviera


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