Select Committee on Scottish Affairs Minutes of Evidence


Supplementary memorandum submitted to the Committee by T&G

  Formally, I would like to thank the Committee and the Secretariat for the opportunity to raise the issues surrounding BP Grangemouth in such an open fashion.

  However, we would like in this Memorandum to clarify a few points for the Members of the Scottish Affairs Committee.

  1.  We have contended throughout our submissions that the Grangemouth Complex is unique amongst the BP sites globally, lain Conn, in his submissions challenged our view on this. Our view of the uniqueness of the Grangemouth site is predicated on the reality that there is an Oil Refinery, Petrochemical plants, an Oil Stabilisation plant which can deal with both Wet Gas and with Dry Gas, and a direct Oil and Gas pipeline. There is no other site in the world which is associated with BP which has these characteristics and assets. lain Conn made reference to "chocolat bayou" in the United States being an integrated site. Our information is that in "chocolat bayou" the Refinery is 50 miles from the Petrochemical plant. This was confirmed by lain Conn when we repaired to the corridor after the meeting.

2.   Pipeline

  Understandably, the Members of the Committee were concerned about the Oil and Gas pipeline being routed directly to England or routed through Grangemouth to Easington. This is not our fear at all. Our concerns about the pipeline are that currently the Forties Pipeline System (FPS) arrives at Hounds Point from which 20% of the Oil is directed into the Grangemouth Complex and the other 80% is directly exported out of Scotland. Indeed, in re-reading the submissions, we can find no reference to us digesting that the pipeline would come through Grangemouth and then extend into England. The only individual who made that suggestion was lain Conn. Our real fear is that the Norwegian Natural Liquid Gases does not come into the Forties Pipeline and then onto Grangemouth but rather the Norwegians land their product in England, bypassing Grangemouth. That must be of concern to the wellbeing of the Scottish economy.

3.   Transfer Of Control From Bp To Newco

  We have not been able to establish at what point Newco will make decisions on behalf of their shareholders. This has serious implications for our Members in relation to their terms and conditions of employment and their pensions. Bluntly, we contend that essentially we are just dealing with BP because even after the first year BP will be an 80% shareholder in Newco. So we remain unconvinced that this is not an artifice.

4.   Plant Closures And Future Investment

  We have always recognised that plant can become obsolete or unprofitable and therefore has to close. In fact we have a series of agreements to that effect but the quid pro quo of this is that the Company have confidence in the Grangemouth Complex to invest in new products and the site. If one was to be Machiavellian, one could paint a picture where the Company, whether it is BP or Newco, would continue to close unprofitable plant but body swerve investing in new build. This would be death by a thousand cuts and would be very difficult to discern at the beginning of the process. We have experience of this happening in comparable global companies. For example, let us take a product which the Grangemouth Complex has a world-class reputation for producing—Polyethylene. At the most recent European Works Council, our Representative posed the question to the Company "if they were to invest in new Polyethylene plant, where would that investment be sited?" The answer was Belgium. This is not encouraging, and doesn't inspire confidence about the future commitment of BP to the Petrochemical plants on the Grangemouth Complex.

  Again, thank you for the opportunity to raise these concerns with you. These ought to be coupled with the four questions that we asked you to consider at the Select Committee meeting on 13 July.

Jim Mowatt

National Secretary, COR

21 July 2004





 
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