Statoil Closes Another 4 Offshore Platforms, Revenue Losses Hit $25 Million Per Day

Oseberg Field Centre, image: Øyvind Hagen – Statoil

(Dow Jones) Norwegian oil giant Statoil ASA (STO.OS) Tuesday said it was closing another four oil platforms due a strike by offshore workers that started Sunday.

The company said it is losing revenue of about 150 million Norwegian kroner ($25 million) per day as a result of the extended production stop, up from day-earlier estimate of NOK115 million per day.

About 700 oil workers are striking after wage negotiations broke down Sunday due to a disagreement about retirement age. Labor unions are angry because Statoil has removed a lucrative early retirement deal, but the Norwegian Oil Industry Association, which represents employers, refuses to discuss retirement as a part of wage settlements.

On Sunday, Statoil said it was shutting down the Oseberg Field Centre and the Oseberg South and Oseberg East fields in the North Sea as well as the Heidrun field in the Norwegian Sea. On Tuesday, the closures were extended to the Huldra, Veslefrikk, Brage and Oseberg C platforms in the North Sea, because these rely on important equipment provided by the Oseberg Field Centre, where workers are striking.

The unions called the move unnecessary since no members are striking on platforms taken out by Statoil Tuesday.

“It’s an apparent attempt to pressure the government to pursue compulsory arbitration,” the unions said in a statement.

A complete shutdown of Norway’s oil and gas industry is unlikely as the Norwegian government could force striking workers back to work by demanding so-called compulsory arbitration, a method used in the past to avert disputes that threaten its key industry.

Norway was the world’s seventh biggest oil exporter in 2010 and the world’s second largest natural-gas exporter in 2009, according to Statistics Norway. Disruptions in production here could lead to higher oil prices.

The Tjeldbergodden plant on the northwest coast of Norway will also have to close, because the supply of natural gas from the Heidrun field will stop,Statoil has said. Tjeldbergodden has about a quarter of Europe’s methanol production capacity and a liquefied natural gas plant with a capacity of 12,000 metric tons per year, according to Statoil.

Sections of the west coast Sture and Mongstad oil terminals will be affected as well, Statoil said Sunday, adding that “this may disrupt deliveries to customers.”

– Anna Molin, Dow Jones Newswires

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