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Email from Shell official fuels rumors of Convent Refinery sale

By John Donovan

The Shell internal email printed below, supplied to us by a Shell insider, was circulated earlier today by David Brignac, an official at the Shell/Motiva Convent refinery, described as “a strategic site for Motiva and Shell”.

The content seems to be a badly botched attempt to deal with a number of rumors causing anxiety that has led to many postings by refinery employees on our Shell Blog facility.

Brignac appears to pour fuel on an already inflammatory situation by admitting that income performance at the refinery since July of 2008 has been dismal. Notably, he does not categorically deny that cost cutting is being undertaken to “better position the refinery for a sale”, conceding that “whenever we as a business entity are not generating income we are not in control of our own destiny”. This appears to be a clear warning to the refinery employees.

INFORMATION FROM MOTIVA WEBSITE: Formed in 1998, Motiva Enterprises LLC operates primarily in the eastern and southern United States. Its operations include nearly 7,700 Shell-branded gasoline stations, three refineries with a combined capacity of 740,000 barrels per day, and ownership interest in 41 refined product storage terminals with an aggregate storage capacity of approximately 19.8 million barrels. The current owners are Saudi Refining, Inc. and Shell.

Shell also had a business relationship with Saudi Arabia in the Al Yamamah “Oil for arms” scandal.

THE LEAKED EMAIL

From:   Brignac, David G
Sent:   Thursday, July 16, 2009 8:16 AM
Subject:  Rumor Mill

Like most of you, I hear many rumors around the refinery. I want to share some of the rumors I have heard recently and take an opportunity to address them.  If you have any questions about this or anything else, please ask your supervisor or manager or ask me when you see me around.

I heard that there was going to be a second round of severance packages.

While none of us can predict what happens in the future, I can tell you there are no plans at this time for a second round of severance packages at Convent Refinery.

Is it true that the E&I craft line will be cut from 30 to 21 people?

There are no plans to reduce the number of E&I crafts.  Rather than decrease the number of Motiva crafts, we are making plans to add a new Motiva multi-skill craft line later this year. You will see the bid poster for these jobs in the near future.

It seems that we are cutting costs at Convent in order to better position the refinery for a sale.

We are getting our costs in line at Convent in order to become competitive in a tough business environment.  While operational performance at Convent has been good, our income performance since July of 2008 has been dismal.  Convent is a strategic site for Motiva and Shell.  However, whenever we as a business entity are not generating income, we are not in control of our own destiny. Thus, the need for us to get our costs in line and start generating positive net income.

I heard that we will be cutting the number of panel operator positions.

We have made reductions in maintenance contractors, support staff, and operations staff.  Also, we are currently evaluating reductions in operator positions.  We are doing in-depth evaluations to ensure we have the right staffing to execute stabilize, slowdown, and shutdown of facilities in the event of emergencies.  In addition, we are evaluating operator staffing levels to ensure we execute the work processes that are so vital to safe and reliable operation. So, we are considering reductions in operator positions, but no final decisions have been made on operator staffing levels.

It seems that we are cleaning up the maintenance backlog so that we can then cut the number of craftsmen needed.

Backlog management is an important part of the maintenance process, and is critical to ensure reliability.  It has been a long time since we have cleaned out the backlog.  Many of the items in the backlog have been there for months, or even years.  So, this was an attempt to get old notifications out of the system.  Many of these had already been fixed.  I want to be clear that our intention is to fix equipment that breaks, and work very hard to understand how we can prevent equipment from breaking down in the future.  We have made significant reduction in craft numbers since January 1st as part of our maintenance transformation work.  This work has focused on increasing craft tool time and craft productivity.  Because we have improved craft productivity, maintenance backlog has not increased as a result of craft reductions.

Is it true that one of the company strategies is to promote hourly employees to staff so that they can then be given a severance package?

Company strategy is to promote hourly employees to staff who aspire to a leadership role, who live the Convent values and deliver results.

I heard that all operator V&I will be taken off of shift and assigned to a general helper pool to do all kinds of different work.

Establishing a general helper pool would require discussions with USW.

Is it true that management has approached the Union about laying off hourly employees without using seniority?

There are no plans for laying off hourly employees.

Again, if you have questions, feel free to ask.

David G Brignac

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