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Wednesday, January 18, 2017
Serinus Energy Inc. has temporarily shut-in production at the Chouech Es Saida field in Tunisia. This field was initially shut-in on January 10 in anticipation of a three-day strike with production stoppage, as voted for by its employees at the Winstar Chouech Es Saida facilities.
In a statement Serinus said that it “fully recognizes and supports the rights of its employees to take work action, however the safety of our employees and the facilities is paramount. The company shut-in production for safety and security reasons on the presumption that production would be brought back on line following the end of the strike.” As the strike includes a sit-in that has persisted after the communicated work action, the company is unable to bring production back on line and must continue its shut-in of the facility for safety and security reasons
For the past two years, the company has been engaged in ongoing dialogue with the Tunisia General Trade Union (UGTT) regarding the need for the company to reduce operating costs at Chouech Es Saida due to the economic situation in the sector. As one part of the ongoing cost savings program, the company recently decided for a program of economic redundancy. The staff reductions in this program are necessary for the it to further reduce operating costs and to remain a viable Tunisian employer and producer of hydrocarbons. In good faith, Serinus along with the Work Inspector of the Tunisian government have been working diligently to follow the appropriate laws, work code and regulations with regards to this process. Unfortunately, UGTT Tataouine has failed to recognize the critical importance of having the operations at Chouech Es Saida operate at a profitable level. The temporary shut-in of the CS-3 well at Chouech Es Saida announced by the company in December, has further exacerbated the economic situation with this field. The combination of UGTT Tataouine’s decision to not cooperate with Serinus on a fair and equitable redundancy process and the fact that the field profitability has been significantly curtailed with the temporary shut-in of the CS-3 well, has led the company to the decision to keep the entire field shut-in until the point of time in the future that the CS-3 well can be brought back online and the field is producing at a profitable level.
The company has procured a replacement electrical submersible pump for the CS-3 well, but is still uncertain as to when this pump will be delivered to the company and the exact timing for the well and field to be back on production.
In the process of shutting in production, the company will prepare for the orderly and safe mobilization of all employees out of the Chouech Es Saida facilities over the coming days. During this shut-in period, the company will continue to engage in dialogue with UGTT regarding the economic redundancy process with the full hope that an agreement can reached and implemented at the time the production at Chouech Es Saida is brought back online in the coming months.
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