Up to 1,400 UK jobs at risk as Chevron plans deep refinery cuts

By Robin Pagnamenta
Thursday, January 21, 2010

As many as 1,400 jobs at one of Britain’s largest oil refineries are under threat after Chevron said last night that it was planning a restructuring that would involve sweeping cuts across its global refining operation.

The announcement, which came after notice was given to employees on Monday, has raised fears relating to Chevron’s refinery at Pembroke in South Wales, which employs 600 permanent workers and 800 contractors.

A UK spokesman for Chevron, the second-biggest American oil company, confirmed that the future of Pembroke was being considered but that no final decisions had been taken.

Any job cuts at Pembroke would represent a crushing blow for the economy of Wales, which has been among the hardest hit regions in the UK during the recession. Last week about 900 workers at a Bosch car parts plant in Glamorgan became the latest victims of the downturn, after hundreds of cuts at companies including Corus and Hoover.

The news also compounds the crisis facing Britain’s struggling refining industry, which is reeling from the mothballing of one plant on Teesside and the possible sale of two others in Cheshire and Scotland.

Lloyd Avram, Chevron’s media relations manager, said that the downstream industry was going through “a very difficult cycle ... The global recession has reduced demand for refined products while global refining capacity continues to surge.”

Mr Avram said that to improve profitability and long-term competitiveness, Chevron was creating a new downstream organisation that would be “less complex, more responsive to market opportunity and smaller, requiring fewer positions and people”.

Unions and Chevron workers in Wales reacted angrily to the announcement, saying that they were deeply concerned about the possible implications of the redundancies and for Britain’s energy security.

As well as supporting local employment, the Chevron refinery pumps £1.5 million a week into the local community through procurement contracts. Its Pembroke refinery is the fifth largest in the UK and has been operating since 1964. It generates about ten million tonnes of oil products a year.

“People are very worried,” one Pembroke oil worker said. “It would be a disaster for the local community.”

A GMB general union official said that any move to close or sell Pembroke raised concerns about energy security. “GMB is increasingly worried that decisions regarding crucial infrastructure projects in the UK are being made in boardrooms overseas,” he said. “We came very close to not having enough gas this month during the big chill and, with decisions about oil refineries and power stations, the Government needs to take a view on behalf of consumers.”

Chevron said that more information would be available in March and that the reorganisation would be complete by the third quarter. Next week it will release its financial results for the fourth quarter of last year.

The oil refining business has been hit by a combination of low margins and the recession. The threat of tougher carbon regulation is also a concern, particularly for operators of plants in Europe.

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