Staff at the Irish National Petroleum Corporation (INPC) are seeking a 15 per cent stake in the State-owned company as the price of their support for its takeover by Tosco Corporation, the US oil group.
Based on the $100 million (€119 million) the American company is offering to pay for the Irish group's assets, the 223 INPC employees could get windfalls worth more than €53,000 (£42,000) each.
Unions representing the INPC staff met the Minister for Public Enterprise, Ms O'Rourke, earlier this month to discuss the issue. Union sources said this weekend the possibility of the employees being given a stake "had not been shot out of the water" at the meeting.
The model would be the Employee Share Ownership Plan (ESOP) put in place at Telecom Eireann at the time of its flotation last year, said the union source. The ESOP trustee now owns 15 per cent of Eircom on behalf of past and present Telecom Eireann workers. The bulk of the INPC staff are represented by SIPTU; others are members of various craft unions and the Manufacturing Science and Finance Union.
According to Department of Public Enterprise sources, such a scheme would be difficult to implement at INPC as the company is not being floated on the stock market. Instead, the assets of the company, which comprise the Whitegate oil refinery in Cork and the Whiddy Island oil storage facility in Bantry Bay, are being sold to the US company. Union sources said if an ESOP did not prove possible they would look for an ex-gratia payment along the lines of the payments made to employees of Cablelink when it was sold to NTL last year. Cablelink staff received in the region of £40,000 each. Such payments are less attractive than an ESOP to the unions because the recipients must pay tax on the lump sum payment. "There is concern amongst the staff that a State asset is being sold off. People are more concerned about job security than anything else," said the union source. He said there had not been any discussion with Tosco Corporation at this stage.
The staff of INPC are unlikely to give up the security of their jobs with the State company and move to Tosco without some sort of compensation, although the US group has given a commitment to operate the Whitegate and Whiddy facilities for at least 15 years.
Tosco is currently carrying out due diligence on the assets of INPC and the process is expected to conclude this month. The broad outline of the deal has been agreed.
Tosco has a chequered safety record. Five workers have been killed at one of its California refineries in the last four years and dozens have been seriously injured. In addition, the company has been fined millions of dollars by US authorities for breach of environmental and safety legislation.
Tosco is the largest of the independent US oil companies and is quoted on the New York and Pacific stock exchanges and encourages its staff to buy shares. It has a turnover of $20 billion and made profits of $442 million last year. It owns six refineries in the US and processes 1.25 million barrels of crude oil a day.
Throughput at INPC's Whitegate refinery is 75,000 barrels a day. Last year INPC made a pre-tax profit of £2.9 million on sales of £287 million. The company has debts of £106 million but these will not be taken over by Tosco. The Government will also retain ownership of the State's strategic oil reserve which is held by an INPC subsidiary, the National Oil Reserves Agency.
