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More Than 100 North Sea Workers Quit Over Safety Fears

July 8, 1988

LONDON (AP) _ More than 100 contract workers refurbishing oil rigs in the North Sea resigned today over concerns about safety following the world’s worst oil rig disaster.

Wednesday night’s fire on Occidental Petroleum Corp.’s Piper Alpha platform off the coast of Scotland left 17 people dead and another 149 people missing and presumed dead. Occidental said a gas leak triggered the blaze.

In the West Sole gas field, 100 to 150 workers employed by a contractor refurbishing three British Petroleum Co. platforms resigned over safety concerns in the North Sea in general, British Petroleum said.

A company spokesman said the workers issued a letter saying they resigned ″due to current offshore working conditions in general in the offshore industry.″

″They felt some action had to be taken concerning safety,″ Keith Gibson, an official with the General, Municipal, Boilermakers and Allied Trades Union told the British Broadcasting Corp. radio.

The British Petroleum spokesman, who wasn’t identified in accordance with British practice, said negotiations between the contractor, Press Offshore Services Division, and its employees ″are in progress.″

The workers were being brought back on shore, he said.

But another company spokesman said workers were not involved and that production was running normally.

The North Sea oil platform blaze is expected to cost insurers more than $1 billion in claims, which would be a record, the Lloyds of London insurance market said.

David Larner, a spokesman for Lloyds, said the insurance costs for the fire ″could top $1 billion. It would make it the largest loss in the North Sea and probably the largest loss on any one unit.″

A unit is one item, as opposed to a wider disaster, which prompts a myriad of related claims.

Occidental Petroleum said Thursday that the company has adequate insurance to cover the disaster. The company insured the rig, plus the costs of any loss of life claims, salvaging the rig, redrilling and any pollution, Larner said.

The latest figure dwarfs the estimated $172 million in insurance costs for the previous worst oil rig disaster, the 1980 capsize of the Alexander L. Kielland rig in the North Sea off Norway, which killed 123 people, according to Press Association, the domestic news agency.

Press Association reported that the Piper Alpha rig was insured for $550 million and that the loss of life claims would come to an estimated $172 million.

The insurance policies for the platform have been spread throughout the Lloyd’s of London market and overseas, and nobody is expected to go out of business over the disaster, Larner said.

″The risk is placed literally around the world. Although it’s a very large loss, it’s unlikely to hurt any particular individual. The whole essence of insurance is to spead the risk as widely as possible,″ Larner said.

Occidental Petroleum said Thursday the destruction of the platform would cut the company’s annual profit by about 5 percent to 10 percent.

Company President Ray Irani said the accident would cost 5 cents to 10 cents a share.

Occidental Petroleum’s stock fell 62.5 cents to close at $26.25 in New York Stock Exchange composite trading Thursday.

Occidental’s profit in 1987 was $240 million, or $1.06 a share, on revenue of $17.75.

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