WHITING | Energy giant BPis freezing pay globally after oil prices plunged in the midst of local and national contract negotiations with the United Steelworkers union.
About 800 salaried, non-union workers at the BP Whiting Refinery will not see any increases to their base pay this year after the price of crude oil fell below $50 a barrel, or half of what is was last June. BP has been cutting thousands of jobs globally as it looks to shed expenses.
Employees got a message Monday from Chief Executive Officer Bob Dudley saying pay had to be frozen this year because of the tough trading environment.
"We can confirm that BP has today informed staff that we intend to freeze base pay across the company," spokesman Scott Dean said. "Together, with the work we are doing to simplify and increase efficiency throughout BP, we see this as a prudent response to the currently challenging market environment in which BP operates."
The freeze does not affect the 1,065 union workers who make up about 57 percent of the refinery's 1,862-member workforce, Dean said. They are working under a three-year contract that expires at midnight on Jan. 31
"Future wage increases for the USW members will be subject to the bargaining of the new contract, which is ongoing," Dean said.
The current contract, which was negotiated in 2012, included pay raises every year. But oil prices have plummeted since contract negotiations began in late December locally and in mid-January nationally.
United Steelworkers oil bargaining chairman Gary Beevers wrote in a newsletter to union workers that it would be the most difficult round of bargaining in years.
"We're experiencing a perfect storm of events: crude oil prices keep falling and are expected to briefly rise and then fall again; gasoline prices are low; there is more competition for oil products, such as diesel, from new refineries coming online from Saudi Arabia, Russia and China," he wrote.
Even in a tough environment, oil companies are still making billions of dollars a year, Beevers wrote.