Strike at BP Rotterdam could delay restart of diesel units: union

3 Nov 2022

Quantum Commodity Intelligence – A strike at BP’s Rotterdam refinery could delay the restart of its diesel-producing secondary units, union officials told Quantum on Thursday, as they prepare an ultimatum in its standoff over pay.

Dutch unions CNV and FNV are set to deliver their ultimatum to BP on Friday and could begin strike action a week later if no agreement between BP and the unions is struck, CNV's negotiator, Jaap Bosma, told Quantum.

If the industrial action goes ahead, it would further delay the restart of the 400,000-bpd Rotterdam refinery’s hydrocracker which was closed last month for planned maintenance.

“I'm working together with my colleague at the FNV and we plan to send the ultimatum to BP tomorrow,” Bosma told Quantum.

“We haven’t decided yet what specific actions we will hold, but our actions will further delay the turnaround at the refinery.”

It follows a union meeting held at the refinery's gates on Monday, during which 90% of the 300 employees present - nearly half the entire staff at the site - voted in favour to start a strike if BP does not improve its pay offer. 

They rejected BP’s offer of a 5% pay increase and are demanding an additional €4,000 ($3,900) bonus and a three-year share match worth 3.35%, but BP's management has not shown any willingness to negotiate, Bosma said.

"BP is currently making money from the high diesel prices. This is partly due to the efforts of these employees. So they can [pay]! And now with the current inflation, they have to," Bosma said in a statement issued earlier this week.

BP did not respond to questions for comment on Thursday.

Unspecified secondary units were closed at the Rotterdam refinery at the start of last month for maintenance, understood to include its diesel-producing hydrocracker.

Located in the Europoort area of the Rotterdam port, the site is one of Europe's largest refineries, processing 400,000 bpd of crude, with much of its product ending up in Germany, Switzerland, Italy, the UK and the US.

Industrial action at several French refineries crippled its national oil industry last month, tightening regional supply and sending prices and refining margins sky-high in northwest Europe.

The last refinery on strike - TotalEnergies’ 294,000 bpd Gonfreville plant – announced the end of industrial action this week, and diesel cracks have softened around $10/b in the last seven days to around $60/b over ICE Brent on ULSD cargoes.

But prompt distillate supply remains broadly constrained and any further disruption to Europe’s output is likely to contribute to shortages in the final months before EU sanctions on Russian exports kick in.