Oseberg Field Centre statoil

Lockout Averted on Norwegian Continental Shelf, Strike Ends

Total Views: 0
July 9, 2012
Oseberg Field Centre statoil
Oseberg Field Centre, Photo: Øyvind Hagen / Statoil

(Bloomberg) — Norway’s government ended a 16-day dispute between offshore oil and gas workers and their employers, averting a lockout that had threatened to halt production from western Europe’s largest crude exporter.

The intervention came after the Norwegian Oil Industry Association, which counts Statoil ASA, Total SA and ConocoPhillips among its members, threatened to halt all output from midnight yesterday. The dispute will now go to compulsory arbitration, the outcome of which is binding.

“We are relieved that we do not need to shut down production on the Norwegian continental shelf,” Jan Hodneland, chief negotiator for the industry association, said in an e- mailed statement. “If the government hadn’t acted now, we would have done that.”

Brent crude futures for August delivery dropped as much as 2.1 percent to $98.22 a barrel on the ICE Futures Europe exchange and were at $98.55 at 8:24 a.m. London time, compared with $100.32 before the Norwegian government’s intervention. Shares in Statoil, the Nordic region’s biggest oil company, gained 1.1 percent to 142.4 kroner in the Norwegian capital.

A lockout “would have had vital repercussions for the Norwegian economy and also for securing deliveries to Europe,” Labor Minister Hanne Bjurstroem said in an interview after announcing the forced resolution. A shutdown would have hurt Norway’s reputation as a “stable and predictable” supplier of oil and gas, she said.


The dispute, which began on June 24, was the first industrywide strike by the nation’s energy workers since 2004 and the longest lasting, according to SAFE, one of the three unions involved. New York oil futures declined as much as 63 cents to $85.36 a barrel after the strike was called off.

The disagreement centers on proposed changes to retirement plans, which would raise the age of entitlement to a full company pension beyond 62 years. The energy companies have said they’re abiding by the government’s general pension reforms.

Talks between the association and unions broke down on July 8 after 13 hours. The government forced an end to walkouts in 1997, 2000 and 2004, said Teodor Sveen Nilsen, an analyst at Swedbank AB.

Statoil is now preparing to resume production at fields affected by the strike, the company said in a statement. Those installations included the Oseberg Field Centre, Oseberg South, Oseberg East, Oseberg C, Heidrun, Huldra, Veslefrikk and Brage, it said.

Output Resumes

“Production from these installations will be resumed as quickly as possible,” Statoil said. “It may take from one to two days to get production started and Statoil expects to have the fields back in full production within a week.”

Norway pumped 1.63 million barrels of oil a day in May, according to the Petroleum Directorate. About 15 percent of the nation’s oil production and 7 percent of gas was affected before the lockout was called off, the Oil Industry Association said June 27. That’s cost the government and companies 3.1 billion kroner ($508 million) in the 16-day strike, it said today. The dispute disrupted as much as 250,000 barrels of oil output a day, according to Statoil.

Josiane Kremer, Kristin Myers and Alastair Reed (c) 2012 Bloomberg.

Back to Main