Strikers Vow to ‘Reverse’ Output at Europe’s Largest Refinery

Shell's 400,000 bpd Pernis oil refinery in the Netherlands will see a reduction in output beginning on April 8, organized by striking workers seeking higher wages.

Last week, the Dutch CNV labor union had given Shell seven days to meet their demands before announcing a strike. That deadline ended on Thursday night, and the union is now making good on its promise.

According to the union, output will be reduced at both Pernis and the Moerdijk chemical plant beginning on April 8, Reuters reported Friday.

The union has given no indications of the amount of output reduction, but Pernis is the largest oil refinery in Europe, and the point is to reduce output to a level that would force Shell to meet demands for higher wages.

Shell had launched major maintenance on 13 refinery units in late January, and that was scheduled to wrap up by the end of this month, according to Platts. It is unclear whether striking workers are intending to explicitly cut output or to refuse to close out maintenance work in order to resume full capacity production.

Platts also cited Shell as saying that it had made a "fair wage offer" to workers at both facilities, which included an average 4-percent increase; however, the union is holding out for a 5-percent increase every year.

Last month, the union said that Shell had offered a 2.5-percent salary increase for 2019 and another 2-percent increase for 2020. 

Speaking of the ultimatum to Shell, CNV director Piet Verburg said that "of course, there will still be technical consultation on this, because a chemical company must be shut down extremely carefully. … The intention is to hit them, for example by reversing production."

Shell has just launched a new unit at Pernis in October last year to enhance performance and ostensibly reduce environmental impact by enabling the processing of more oil into cleaner transportation fuels.

By Damir Kaletovic for Oilprice.com

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