Shell resolves worker dispute and eyes restart of flagship FLNG project

Shell and Australia’s Offshore Alliance (OA) have reached an agreement that lays the foundation to resolve the long-running wage dispute that culminated in 76 days of protected industrial action — and output being shut in — onboard the UK supermajor’s Prelude floating liquefied natural gas vessel offshore Australia.

Shell had suspended production from Prelude FLNG in June and the following month it stopped exporting LNG cargoes. The facility has a nameplate production capacity of 3.6 million tonnes per annum of LNG.

Members of OA, a partnership between Australia Workers’ Union (AWU) and the Maritime Union of Australia, were able to secure a range of improvements to their pay and rostering arrangements and — critically — new job security and career progression provisions.

Shell has agreed that if it increases its use of contractor or labour hire workers it will not reduce the number of employees covered by Wednesday’s agreement as a consequence, noted the OA.

“Shell is pleased to confirm an in-principle enterprise agreement has been reached with the Australian Workers’ Union (AWU)and Electrical Trades Union (ETU) in relation to the Prelude FLNG facility,” a Shell spokeswoman told Upstream.

“Our strong preference was for this to be resolved through an agreement and we are confident this was the best outcome. We are now focused on moving forward as a business, returning to safe, stable production and delivering affordable, reliable energy to our customers to meet the critical demands on energy security.

“The process to formally lift the work bans in place under the protected industrial action is expected to be completed shortly, which will enable the facility to commence the process to prepare for a hydrocarbon restart. We will work methodically through the stages in this process with safety and stability foremost in mind,” she added.

Union members will vote on the enterprise bargaining agreement (EBA) after the access period opens later this week.

Agreement reached

An OA spokesperson and the AWU national secretary Daniel Walton said the union was very happy to reach an agreement with Shell Prelude management.

“While it’s disappointing that industrial action had to take place our members should be extremely proud of what they have secured for themselves, for their families and for each other,” Walton said.

“I know our members are keen to get back to work as usual, are more secure in their jobs and are able to help Shell Prelude be as successful as it can be.”

The OA said in a Facebook post on Wednesday:“We have nothing but the highest respect for our Prelude members who have walked the walk for 18 months in our EBA campaign and for the last 76 days of protected industrial action.

“We will provide more details of the bargaining outcomes later in the week but we are very proud of the men and women on the Prelude who fought for their union EBA.”

Walton added: “On behalf of the OA I extend my thanks to the Fair Work Commission and acknowledge the long nights and weekends necessary to mediate this dispute and assist the union and Shell reach agreement.”

The end might be in sight for this labour dispute but other battles are on the horizon.

“The Offshore Alliance now looks forward to negotiations with [other operators in Australia] Santos, Chevron and Woodside where we hope to achieve similarly positive outcomes but hopefully via a smoother process,” the OA said.