Norway calls meeting with both sides of oil strike
BY CHRISTINA ZANDER
STAVANGER -- Statoil ASA and other companies represented by Norway's Oil Industry Association threatened to lock out workers and shut down production on the Norwegian Continental Shelf from Tuesday forward, in the hope of forcing an end to the strike that has put upward pressure on oil prices and crimped revenue.
Oil companies and three unions representing offshore workers--Safe, Industri Energi and Lederne--have been negotiating on wages but are clashing over employee demands for better pension terms.
The government has the ability to impose compulsory arbitration, a move that would in effect push striking employees back to work.
"We still don't know what the minister would like to discuss; it might be a general information meeting," Leif Sande, leader of the Industri Energi union, told Dow Jones Newswires Friday.
Thus far, a little more than 10% of the 6,500 workers that are covered by the offshore-wage agreement have actually been pulled off the job as a result of the strike, which began June 24. At that level, the strike has slowed the country's oil output by 240,000 bpd, or 15%, and its natural gas output by 11.9 MMcmgd, or 7%. It has led to more than NOK 2 billion (US$334 million) in lost revenue for oil companies.
The lockout--slated to begin at midnight Monday--would affect all of the 50 or so companies that have production on the Norwegian Continental Shelf, including Total SA (TOT), ConocoPhillips (COP), Royal Dutch Shell PLC (RDSB) and BP PLC (BP). Total production of oil and gas on the Norwegian Continental Shelf is 3.8 MMboed, according to OIA, and the value of the daily production is estimated at NOK1.8 billion.
According to the U.S. Energy Information Administration, Norway was the world's 14th-largest supplier of oil in 2011, producing about 2.5% of the world's oil on a daily basis, most of which is tagged for export.
Dow Jones Newswires