Talisman refuses to toe contractor rate-cut line - Aberdeen Press & Journal, June 2
OIL company Talisman has broken ranks and does not want the latest 8% independent professional contractors rate-cut imposed on anyone involved with its projects.
The company clearly believes the cut will damage both itself and the wider North Sea oil and gas industry.
Documents passed to the Press and Journal show that Talisman has been unhappy about the reduction - the second recommended to its members by the Offshore Contractors Association this year - since at least mid May.
In a letter to its North Sea contractor group, the Canadian company says that, what matters, is long-term effectiveness of its business, not potentially disruptive short-term gains.
UK general manager Paul Blakeley wrote: "While Talisman believes it is important to align ourselves with prevailing market conditions related to such rates, we do not feel it is in the best interests of Talisman, or the oil industry, to consider further rate reductions of this nature at this time.
"Talisman wishes to avoid fuelling temporary rate fluctuations, preferring instead to focus on longer-term contractor rate trends.
"We plan to continue to monitor the marketplace with the goal of identifying, quantifying and, as appropriate, implementing legitimate sustainable trends in market rate conditions as they develop."
Ever since Talisman entered the North Sea arena, the company has sought to work co-operatively with its workforce - both employees and contractors. It has also actively sought trade union involvement.
Appreciating the Blakeley stance, Talisman Contractors Group members have pledged to back the company. They have promised that the action group created among the 1,500 or so individuals will not damage its operations.
"We have instructed the action group that, at the present time, we do not wish to take action against Talisman operations," Talisman Contractors Group wrote in a letter to Mr Blakeley dated May 31. This decision has been taken as a direct result of Talisman's decision not to reduce its contractors' rates any further.
"We hope to have your continuing support and, in return, will provide ours."
So far, it seems Talisman stands alone among the operators.
However, yesterday, evidence surfaced of disarray among OCA members. Having implemented a 10% cut in January, they had planned the further 8% reduction for May 31. Now it seems this has been put back to June 27.
But the P&J has documentary evidence showing that this has not prevented some firms/agencies taking action already and suggesting that at least some independent contractors had in real terms suffered a hefty erosion in their income since 1990.
In October 1990, one professional was on £250 per day.
In August 1992, this was cut to £220 per day.
June 1995 saw him back on £255 and rising.
On May 21, he received a letter imposing the second cut this year. The 8% reduction to £244.26 per day effective May 30. His offshore rate was reduced to £366.39. Benefits packages have also been eroded.
The person concerned summed it up saying the May 21 letter was the "last straw".
"That's progress. In 'valuing people', 10 years' direct experience at a professional level in this industry has brought no reward," he said.
"I am told that I am lucky to have a job."
Jake Molloy of North Sea workers trade union OILC applauded Talisman's stance. He said the company had always been far-sighted and considerate.
"They appreciate the loss to their business that imposing the cut will have. They communicate with their people. They value their people. That's got to be the best way in the long-run."
Mr Molloy, who is pushing for talks rather than further walkouts by the professionals, added that it appeared Kvaerner was not going to implement the 8% cut, even though its top man in Aberdeen, Syd Fudge, chaired the OCA.
However, Mr Fudge said Kvaerner would take action, but that the reduction would be applied "where appropriate".
OILC's general secretary indicated the trend towards casualisation of the UK offshore industry's workforce bore a disturbing resemblance to "The Lump" . . . the euphemism for the casual way in which the UK construction industry used to be run, but now largely refrains from on safety and reputation grounds.
The OCA appears not to have changed its stance.
"Our position remains that this (cut) is a recommendation, if and when our members want to implement it," said a spokesman.
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