Oil & Gas

Fears over Scots oil as Grangemouth stays shut

First Minister Alex Salmond has warned of “huge uncertainty” hanging over the future of the Grangemouth oil refinery as he called for a solution to the industrial dispute.

The row at the petrochemicals site dominated a meeting at Downing Street yesterday involving the SNP leader, Prime Minister David Cameron and Scottish Secretary Alistair Carmichael.

Ineos, the company that runs the refinery, was accused of “economic vandalism” after deciding to keep it shut even though a strike has been called off.

The Unite union said Ineos was “holding Scotland to ransom”.

The union announced it was calling off a planned two-day strike from Sunday even though peace talks at the conciliation service Acas ended without agreement after 16 hours.

Workers were due to walk out for 48 hours from Sunday over the treatment of union convener Stephen Deans, who was involved in the row over the selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended by Ineos and later reinstated, but is facing an internal investigation over issues linked to the Falkirk affair.

After talks at the Joint Ministerial Council in London, Salmond said “there’s still now huge uncertainty about the long-term future of what is a major chemical and industrial complex”.

“Both governments would prevail on both Ineos and Unite to find a solution that gives Grangemouth a future.

“The dispute has moved from being an immediate threat to fuel supplies continuity in Scotland to one that is about the survival of Grangemouth as a chemical plant and refinery in Scotland.”

Carmichael also said the stakes were “exceptionally high”.

“I will not rush to judgment on it but it is a disappointment.

“I am concerned and want to know why management has chosen to attach pre-conditions in the way that they have done.

“At first sight it doesn’t look helpful, it doesn’t look constructive because this is a dispute which has enormous danger of damaging Scotland’s economy and confidence.

“There is a legitimate interest for government both in Edinburgh and London to hold both parties to account here.”

A company spokesman said the refinery “is shut down and will remain shut down.”

“Grangemouth is financially distressed,” they said.

“The industrial action called by Unite the union has inflicted significant further damage on the company.”

Unite regional secretary Pat Rafferty said: “Ineos’s decision to keep Grangemouth shut is an act of economic vandalism.

“There is absolutely no reason for the site to remain shut – the company is holding Scotland to ransom.”

Any extended closure of Grangemouth Refinery could disrupt the flow of Brent crude from the North Sea.

The Forties pipeline system could be affected because the Kinneil oil processing terminal – where oil from the Forties field comes ashore – relies on Grangemouth for its steam and power.

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