Strike by more than 160 Apache workers raises concerns over Forties flows
Key Facts
More than 160 offshore workers at Apache plan to strike, amid a union warning of potential disruption to British fuel supplies through the Forties system in the North Sea, according to Britain's PA news agency. The action involves company employees on the Forties and Beryl platforms in a dispute over a pay offer and arrears. Apache has countered the warning by saying it expects other producers' flows through the system to continue, while preparing to handle a suspension of its own production. The dispute matters to the oil sector because the company's operations are connected to a network that receives production from multiple offshore fields. Forties Blend is linked to the Brent benchmark used to price a large share of global oil, according to Reuters.
Apache said in comments reported by PA that its offer to employees covered by collective bargaining includes a 4% pay increase. The company added: "Our offer provides a 4% pay increase," specifying the increase it is proposing in the current dispute. The labour dispute centres on the offer and arrears, while the potential impact of the strike extends to the operation of the company's offshore facilities. Operationally, Apache says the reduction in pipeline pressure resulting from a suspension of its production would be similar to that during a routine maintenance shutdown. The company bases its position that the industrial action will not disrupt other producers' flows through Forties on that comparison.
The Forties Charlie platform plays a role in gathering production within the field's infrastructure, according to Apache's published technical description. The Forties system itself is wholly owned by Ineos, which describes it as designated critical national infrastructure. Ineos says the network receives oil and gas liquids from more than 80 offshore fields, alongside flows from St Fergus. These liquids are processed at Kinneil, along a route running from offshore installations to processing and delivery facilities. The system delivers Forties Blend crude to customers at Hound Point, according to Ineos's description of the network's operations.
Ineos said it has invested more than 500 million pounds in upgrading and securing the Forties system since acquiring it in 2017. The company links these investments to upgrades to the network it owns and operates to receive and process liquids from offshore fields. Apache entered the North Sea in 2003, when it acquired an operating interest of about 97% in the Forties field. According to the company's portfolio overview, the acquisition of that stake marked its entry into operations in the region. The operating chain thus brings together a field Apache entered through an acquisition and a transport and processing network whose ownership later passed to Ineos.
Apache's Forties operations experienced an earlier shutdown announced by the company on 11 December 2017, due to unscheduled maintenance on an onshore section of the pipeline system. The company said at the time that production from the field had stopped as of that day, in an announcement detailing the impact of the maintenance work on its North Sea operations. Net production from the Apache operations affected by that historical shutdown was 35800 barrels of oil per day, according to its statement published at the time. The shutdown in that instance was caused by maintenance on a section of the transport network, while the current dispute concerns a strike by the company's offshore employees. In its position on the planned action, Apache compares the impact of suspending its production on pipeline pressure to that of a routine maintenance shutdown.
Over the longer term, Ineos expects the Forties system to remain operational until at least 2040, according to its published commercial description of the network. The company said: "We expect the Forties system to remain operational until at least 2040," specifying its expected operating horizon for the system. The activities Ineos describes include receiving and processing offshore liquids and then delivering Forties Blend to customers. The continuation of these operations is linked to a network that gathers flows from multiple fields, alongside its role in delivering a crude grade included in the Brent benchmark. As for the planned strike, Apache maintains its expectation that other producers' flows will continue, against the union's warning of potential supply disruption.