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  • The Internal Employee Letter Shell Sent To Its Striking Workers

    The largest US oil worker strike since 1980 is into its fourth week, as United Steelworkers Union members at 12 refineries responsible for one-fifth of US production capacity were walking picket lines. Shortly following the cessation of another round of unproductive talks between the USW and oil company representatives ended Friday night, the union notified Motiva Enterprises (a joint venture between Shell Oil and Saudi Refining) of a strike by its members at the company's refinery in Port Arthur, Texas, which has a capacity of 600,250 bpd.

    The USW also gave notices of strikes to start at Motiva's refineries in Norco and Convent, Louisiana, and the Shell chemical plant in Norco. Capacity at these facilities is 235,000 and 238,000 bpd. These refineries are also jointly operated by Royal Dutch Shell and Saudi Refining.

    In a letter to striking employees at the Shell and Motiva facilities, Shell officials said the company has offered annual pay raises of 2% in each of the first two years of a proposed three-year pact and a 2.5% increase in the third year. Shell has also offered to evaluate issues of worker fatigue, which has been referenced as a factor in at least one fatal incident in the past decade. Shell also told striking USW members that the principal sticking point was non-union contractors who perform daily maintenance. The USW would like to these workers replaced with USW members.

    Below are excerpts from an internal employee communication from Shell, issued Saturday, where the company provides an update on the current status of the negotiations with the United Steelworkers International Union:


    "One month ago, Shell Oil Company sat down at the bargaining table with a negotiating team representing national leaders of the United Steelworkers International Union (USW). Our goals were – and still are – to reach an agreement that respects the needs and interests of our employees and ensures the ongoing safety as well as economic health of Shell refineries and chemical plants."

    "To that end, we have put seven offers on the negotiating table. The USW International Union leaders have rejected all seven of them. In addition to striking at our Deer Park refinery, chemical plant and lab, the USW on Friday, called for strikes at Motiva’s Port Arthur Refinery, Motiva Convent, Motiva Norco and Shell Chemicals Norco. In total, 14 facilities across multiple industry companies are facing strikes."

    "As these strikes occur, we’re grateful for the strong relationships we have maintained with employees at our sites, which was demonstrated through the care and respect given during the handover to replacement workers thus far."

    "We’re extremely disappointed that the USW International Union has seemed unwilling to achieve a timely and reasonable agreement, particularly since we have fostered strong cooperation with local members as evidenced by the productive outcome at many local negotiating tables."

    "Indeed, we’re seeing little evidence that the USW’s leaders are interested in a meaningful settlement any time in the foreseeable future. We note, also, that it is not clear that the USW International Union leaders share our commitment to bargain respectfully at the negotiating table – preferring, instead, to misrepresent the facts in the media. With that in mind, I’d like to share with you more information about the position we have taken during the course of bargaining and the issues we are attempting to resolve."

    "The central issue standing in the way of a settlement is not safety or fatigue, nor is it even about healthcare or wages, as the union claims. Those things are important to all of us, and it’s important to share that we have engaged in productive negotiations regarding each of these issues."

    "The central issue of the USW’s national leaders is their continued demand that Shell replace routine maintenance contractors with USW-represented employees."


    "It’s unreasonable for the USW to demand that Shell agree to their position. Our established practice of utilizing contractors supports the need for flexibility in hiring to accommodate economic cycles and maintenance schedules. And we’re open to a variety of ways to maintain a strong roster of skilled craftsmen available to each of our locations. But hiring flexibility is a proven way to protect our core Shell workforce and the long-term economic viability of our business. It is the most effective way to keep our sites running safely, efficiently and reliably. This strategy has served us well as we have not had to conduct any layoff in decades."

    "Despite our disappointment, we will continue to negotiate in good faith."

    "These strikes are unfortunate in light of Shell’s commitment to our employees and our diligent focus on safety and training, as well as our highly competitive compensation and benefits package."

    Comment


    • Unions... they keep America on the bench.

      Comment


      • Would... That's pretty shitty. Were paying higher gas prices for no reason so the unions can go for a power grab.

        Comment


        • Fun fact:

          A brand new AC walking rig at one drilling contractor I know commands upwards of $28,000 / day to contract.
          They had contracts in place with a big E&P out there before oil shit the bed, and now the E&P are opting to pay half the day rate on at least one rig to keep it sitting in the drilling contractor's yard rather than have it drilling.

          Think about that... they are paying close to $14,000 per day for the contractor to keep the rig idled.

          Comment


          • Originally posted by Strychnine View Post
            Fun fact:

            A brand new AC walking rig at one drilling contractor I know commands upwards of $28,000 / day to contract.
            They had contracts in place with a big E&P out there before oil shit the bed, and now the E&P are opting to pay half the day rate on at least one rig to keep it sitting in the drilling contractor's yard rather than have it drilling.

            Think about that... they are paying close to $14,000 per day for the contractor to keep the rig idled.
            I can get their contract writer hired in less than 24 hrs...
            sigpic18 F150 Supercrew - daily
            17 F150 Supercrew - totaled Dec 12, 2018
            13 DIB Premium GT, M6, Track Pack, Glass Roof, Nav, Recaros - Sold
            86 SVO - Sold
            '03 F150 Supercrew - Sold
            01 TJ - new toy - Sold
            65 F100 (460 + C6) - Sold

            Comment


            • Originally posted by Chas_svo View Post
              I can get their contract writer hired in less than 24 hrs...
              Lmao

              Comment


              • Originally posted by Ruffdaddy View Post
                Would... That's pretty shitty. Were paying higher gas prices for no reason so the unions can go for a power grab.
                Fighting through obsolescence must be a bitch.

                Comment


                • Originally posted by Strychnine View Post
                  Fun fact:

                  A brand new AC walking rig at one drilling contractor I know commands upwards of $28,000 / day to contract.
                  They had contracts in place with a big E&P out there before oil shit the bed, and now the E&P are opting to pay half the day rate on at least one rig to keep it sitting in the drilling contractor's yard rather than have it drilling.

                  Think about that... they are paying close to $14,000 per day for the contractor to keep the rig idled.
                  And it is all because the capital is too cheap. They can get money for next to nothing because interest rates are so low. It is also part of the reason that a lot of these guys who are ass deep in debt are going to "drill right on through it". We will see if it is enough to sink oil to a $39 handle I guess.
                  Originally posted by racrguy
                  What's your beef with NPR, because their listeners are typically more informed than others?
                  Originally posted by racrguy
                  Voting is a constitutional right, overthrowing the government isn't.

                  Comment


                  • Long article: Will America’s shale boomtowns bust? A report from the heart of North Dakota’s fracking country


                    Comment


                    • Rumor has it that Statoil is looking to snatch up EOG.

                      Also, WTI is back under $50.

                      Comment


                      • from 2.09 to 2.29 in two days. Mother fuckers.
                        sigpic

                        Comment


                        • Originally posted by Strychnine View Post
                          Rumor has it that Statoil is looking to snatch up EOG.

                          Also, WTI is back under $50.
                          Originally posted by Magnus View Post
                          from 2.09 to 2.29 in two days. Mother fuckers.
                          Clever fuckers, DFW was closed on Monday and Tuesday, so the oil companies are making up for it, regardless of oil prices.

                          Comment


                          • Originally posted by Magnus View Post
                            from 2.09 to 2.29 in two days. Mother fuckers.
                            Unleaded went from $2.28 up to about $2.90 where I live in California. Once again the price of the final product defies the laws of supply and demand.

                            Comment


                            • This is what I was talking about the other day. Capital is so cheap that the speculators can afford to put oil away for the long term but once there is no more storage capacity that party is over. We are rapidly approaching that point.

                              Oil supply running ahead of demand hasn't just pressured prices, it's also filling up storage space, potentially pushing crude toward another leg down.




                              Are oil producers running out of closet space?

                              Leslie Shaffer | @LeslieShaffer1
                              13 Hours Ago
                              CNBC.com




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                              <p>Why BofA remains an oil bear</p> <p>With rising supply and a lack of recovery in demand, oil prices will still see downside pressure over the coming months, says Francisco Blaunch, head of Global Commodities Research at Bank of America Merrill Lynch.</p>


                              Oil supply running ahead of demand hasn't just pressured prices, it's also filling up storage space, potentially pushing crude toward another leg down.

                              "We're going to see pretty fast inventory builds over the next few weeks," Francisco Blanch, head of commodity research at Bank of America-Merrill Lynch, told CNBC Wednesday, noting that global supply is running around 1.4 million barrels a day above demand.

                              "If you run out of space, prices tend to react a lot more violently to adjust that supply and demand imbalance and that's what we expect over the next few weeks," he said, forecasting both WTI and Brent will fall toward $30 a barrel. Prices settled at $50.99 and $61.97, respectively, on Wednesday.

                              Read More › Oil may fall again … but buy energy stocks?


                              He cited fresh American Petroleum Institute (API) data which showed U.S. crude inventories climbed by a larger-than-expected 8.9 million barrels in the week ended Feb. 20, for a total of around 437 million barrels squirreled away. Around 50 million to 100 million barrels of crude oil may be gathering dust in floating storage by the end of the second quarter, compared with around 110 million barrels in April 2009, during the global financial crisis, he estimated.




                              The supply build isn't helped by an oil market that's in contango, or when the "spot" price is lower than the price of the future contract. That makes it more profitable for traders to stick their oil in storage to sell at a higher price later.


                              As much as 80 percent of the commercially available storage in the U.S. may already be utilized, Premasish Das, downstream analyst at IHS Energy Insight, told CNBC last week.


                              Oil tanks and pump jacks are seen in an oil field near Bakersfield, Calif., on a foggy day, Jan. 17, 2015.
                              Lucy Nicholson | Reuters

                              Oil tanks and pump jacks are seen in an oil field near Bakersfield, Calif., on a foggy day, Jan. 17, 2015.


                              "As the oversupply increases again in the second quarter, the contango structure will widen. This will further incentivize crude storage," Das said.

                              Others are also concerned about how quickly space could run out. "Within around two months, [onshore storage will] be completely exhausted," Ivan Szapakowski, a commodity strategist at Citigroup, told CNBC last week. "The only remaining storage globally will then be floating storage, tankers."

                              Read More › Oil slide could trigger OPEC emergency meeting


                              Citigroup is forecasting oil prices to fall toward $20 a barrel before recovering.

                              Oil is already getting stashed offshore. Tanker prices and lease rates have doubled over the past 18 months, Gaurav Sodhi, a resources analyst at Intelligent Investor, told CNBC last week.

                              "Clearly, someone is going out there and leasing a lot of offshore storage and those lease rates are much higher. That suggests to me that there's a massive supply of oil sitting on the ocean," Sodhi said, noting each tanker can hold around 1 million to 2 million barrels each. "That sort of storage is going to take a while to unwind."

                              Stashing oil offshore can also create other headaches. It's harder to move the oil to where the buyer may want it and there can be issues with pollution, potentially making it more costly, IHS' Das noted.


                              But despite the difficulties, the oil hoard may only grow in the near term. Das noted that Asia is heading toward its refinery maintenance shutdown period in the second quarter.

                              Additionally, a strike among refinery workers in the U.S. is now into its fourth week, affecting plants responsible for around 20 percent of the country's production. Media reports said no talks between unions and management are scheduled for this week. If demand from the affected refineries declines further, it could be more bad news for inventory growth and prices.
                              Originally posted by racrguy
                              What's your beef with NPR, because their listeners are typically more informed than others?
                              Originally posted by racrguy
                              Voting is a constitutional right, overthrowing the government isn't.

                              Comment


                              • DPI reported -.7

                                Yep, you heard right. NEGATIVE .7

                                I think it's mostly due to gas prices.

                                I still just filled up at $2.02

                                Comment

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