Processing Magazine

Strike in Scotland closes major North Sea oil pipeline

April 28, 2008
According to the Associated Press, hundreds of workers at Scotland''s only oil refinery began a 48-hour strike recently that forced BP PLC to shut a pipeline system that delivers almost a third of Britain''s North Sea oil.

BP said it had completed the closure of the Forties Pipeline System by 6 a.m., when 1,200 workers at the Grangemouth refinery in central Scotland walked off the job. The pipeline brings in 700,000 barrels of oil a day from the North Sea to BP''s Kinneil plant, which is powered from the Grangemouth site.

Energy industry group Oil & Gas U.K. said the strike, over pension issues, could cost $100 million a day in lost production.

The main effect of the walkout was likely to be felt by the British Treasury -- which relies heavily on taxes from oil production -- and at gas stations in Scotland, some of which limited purchases in anticipation of the strike.

The government urged motorists not to hoard fuel, saying there would be enough to go around. It wants to avoid a repeat of scenes in 2000 when motorists were forced to line up at gas stations as truckers angry at heavily taxed fuel brought Britain to a standstill by blockading refineries.

Gas stations in and around Edinburgh were limiting purchases to 20 pounds -- equivalent to $40 -- per visit, and lines of cars formed beside some pumps. A number of stations reported they had run out of gas and diesel.

Some Scottish gas stations were charging 1.25 pounds -- $2.47 -- for a liter of unleaded, up from about 1.08 pounds -- $2.14.

The Scottish government said 72,000 tons of extra fuel was being imported from Europe to help keep the country running.

Prime Minister Gordon Brown said the strike was unnecessary and called for new negotiations between Grangemouth''s owner, the chemical company Ineos, and the workers'' union, Unite. Talks to avert a strike broke down earlier this week.

The refinery strike is one of a series of labor disputes to hit Britain as the global economy weakens.

A nationwide teachers'' strike over pay issues shut about a third of schools across Britain as the government tries to clamp down on public sector wage increases due to inflation fears.