BP plc BP established fair wages for the union workers at its Rotterdam refinery and restarted all units after it had been idled last month.
BP and union workers settled on a new three-year package. The package includes a 6% wage increase, a €4,000 one-time bonus and the ability to participate in a stock compensation plan, which enables workers to gain from the company’s profits.
The Rotterdam refinery was shut down last month due to a sudden steam outage. The refinery workers have been threatening to call a strike unless the company raises its pay offer to employees.
Workers at the refinery started a work-to-rule action as BP was unable to reach a salary settlement. Work-to-rule action means workers refuse to perform duties beyond those mentioned in employment contracts.
The Rotterdam facility is one of the largest oil refineries in Europe, producing approximately 400,000 barrels per year. It accounts for almost 3% of northern Europe’s refining capacity. Any delays to the refinery’s restart could have worsened the diesel crisis in Europe.
Workers partially restarted the refinery as salary negotiations were ongoing. One of two crude distillation units was already restarted, while the workers kept the Fluid Catalytic Cracking unit offline, which produces light ends such as gasoline.
A delay in the refinery restart came as Europe is rushing for diesel supply and stocking up on Russia diesel before an EU ban begins in February next year. Europe’s reliance on Russia fuel has fallen more than 50% since Russia’s unprovoked invasion of Ukraine. Despite this, Russia is still the continent’s largest supplier of diesel.
Shares of BP have outperformed the industry in the past six months. The stock has gained 2.4% compared with the industry’s 0.5% growth.
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Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Schlumberger Limited SLB is a leading oilfield services company, providing services to oil and gas explorers and producers across the world. SLB’s third-quarter 2022 earnings of 63 cents per share beat the Zacks Consensus Estimate of 55 cents.
Schlumberger is expected to see an earnings surge of 68% in 2022. As of Sept 30, 2022, SLBhad approximately $3,609 million in cash and short-term investments. It had long-term debt of $12,452 million at the end of the third quarter.
Helmerich & Payne Inc. HP is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s fiscal third-quarter 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 275.6% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
DCP Midstream, LP DCP is a leading energy infrastructure firm. DCP’s third-quarter adjusted earnings of $1.50 per unit beat the Zacks Consensus Estimate of $1.05.
DCP Midstream is expected to see an earnings surge of 181% in 2022. The company currently has a Zacks Style Score of A for Growth and Value. DCP generated an excess free cash flow of $52 million in the third quarter.
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