Oil and gas workers strike in Norway on Tuesday, cutting production

  • Strike begins midnight local time (2200 GMT on Monday)
  • Gas production could drop by about 25% by Saturday, oil cut by 15%
  • The government can intervene in special circumstances
  • Union workers want a higher wage increase than in the negotiated agreement

OSLO (Reuters) – The union and the lobby representing oil companies said on Monday that Norwegian workers abroad are likely to strike on Tuesday in a halt that will cut oil and gas production because the negotiating parties have not made progress.

“In the current situation there will be a strike tonight,” a spokesman for the Norwegian Oil and Gas Union told Reuters. “The situation is completely closed.”

Industrial work will begin at midnight local time (2200 GMT) in three fields — Gudrun, Oseberg South and Oseberg East — and will then expand to three more fields — Kristin, Heidrun and Aasta Hansteen — from midnight Wednesday.

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The seventh field, Tyrihans, will have to be closed, because its production is processed from Kristin.

The strike, in which workers are demanding higher wages to offset rising inflation, comes amid soaring oil and gas prices, with gas supplies to Europe particularly tight after Russian exports curtailed.

The Liedern union said on Monday it would further escalate the industrial strike from July 9, which triggered a strike by workers at the Sleipner, Gulfax A and Gulfax C platforms.

“With the situation now, it looks like there will be a strike,” Audun Ingvartsen, head of the Leeds union, told Reuters.

By Tuesday, oil production will be reduced by 89,000 barrels of oil equivalent per day and gas production by 27,500 barrels per day, or 4.4 million cubic meters per day, Equinor said.

The National Oil Company said on Sunday that a strike would cut the country’s gas production by 292,000 barrels of oil equivalent per day, or 13% of production, by Wednesday. Read more

The lobby added that oil production would decrease by 130,000 barrels per day, equivalent to about 6.5% of Norway’s production, according to Reuters calculations.

By July 9, Slipner, Gulfax A, and Gulfx C will likely cease production, as Ledern’s members are large workers deemed essential to production, with potentially ripple effects on other fields pumping their products through those fields.

If they do, it could cut production of crude oil and other oil liquids by another 160,000 barrels of oil screw and natural gas production by nearly 230,000 barrels of oil, according to Reuters calculations.

Thus, nearly a quarter of Norway’s gas production will be shut down by Saturday, as well as about 15% of its oil production.

Equinor, the platform operator, was not immediately available to comment on the impact of the recent escalation.

Government

The Norwegian government said it was following the conflict “closely”. It can intervene to stop the strike if there are exceptional circumstances.

Union leader Ingvartsen said the latest escalation was not a way to pressure the government to step in and force a settlement. He said he had not been in contact with the government.

“Our goal is for employers to reach out to us and listen to their employees,” he told Reuters.

Ledern union members, who represent senior workers, voted Thursday against a proposed wage agreement negotiated by companies and union leaders. Read more

Other Norwegian oil and gas workers’ unions have accepted the wage deal and will not go on strike.

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Editing by Nora Polley, Louise Heavens, William MacLean and David Evans

Our Standards: Thomson Reuters Trust Principles.

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