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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