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While Maritime Pilots Strike in Norway, Gasoline Supplies Run Low

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May 29, 2012

OSLO (Dow Jones)–Southern Norway risks a gasoline shortage in the coming days, as maritime pilots strike as part of a wider public sector dispute over wages, stopping domestic shipments as well as the export of oil products.

“We’re already hit,” said Pal Heldaas, a spokesman at Statoil Fuel & Retail ASA, one of the country’s leading fuel vendors with about 500 gas stations all over the country. “We can’t get tankers in and out in Harstad [in northern Norway] and Oslo.”

Fuel vessels are required by law to be guided by pilots to ensure safe navigation to and from ports, as are all vessels exceeding 70 meters in length.

The strike also hit exports at the Slagentangen refinery southwest of Oslo, said Esso Norge, a subsidiary of Exxon Mobil Corp. (XOM). The refinery produces about 110,000 barrels a day of oil products such as gasoline and diesel.

“About 60% of the production is exported by ship, and has been hit already as we can’t get in with tankers to ship it,” said Esso spokesman Eirik Hauge.

The refinery is running as usual, but needs new shipments of crude oil to keep producing, but production could be reduced or shut down “by the end of the week,” Hauge said.

Thursday, 42 out of 43 maritime pilots in the Oslofjord in southern Norway were called to strike after centralized wage negotiations failed. Wednesday, the strike will be expanded by 103 pilot boat drivers, who are transporting pilots to and from vessels.

The Norwegian oil giant Statoil ASA (STO) told Dow Jones Newswires that about 30 vessels transporting gas, crude oil and oil products could potentially be hit at their biggest oil and gas terminals Kaarstoe, Mongstad and Sture.

By May 29, eight vessels sailing into the Oslofjord and 15 outgoing ships were waiting for a pilot, according to the Norwegian Coastal Administration, the employer of the striking pilots.

The Norwegian Petroleum Institute, representing Norwegian fuel companies, said it was working with alternatives for the Oslo area, seeking different supplies and exemptions.

“The short version is that we will have trouble with the gasoline supply first. This will hit the southeastern part of Norway,” said the Institute’s secretary general Inger-Lise M. Nostvik.

The storage capacity is bigger for diesel than gasoline, she said. Gasoline supplies also depend on imported ethanol, which is blended into the gasoline before it’s sold. According to Statoil Fuel & Retail, an ethanol tanker is currently waiting to ship its products to Sjursoya due to the strike.

“Sjursoya may run empty by the end of this week. The hard part is to get products in. We do what we can to avoid it, but the storage facilities will finally run empty,” said Nostvik.

“We have fuel supplies until the end of the week, and longer in some areas,” said Statoil Fuel & Retail‘s Pal Heldaas. “In Oslo, we risk running empty on ethanol by the end of the week.” However, the strike won’t bring all fuel transport to a halt because some privately employed pilots and helicopter-borne pilots are still working.

“Helicopter services in western and northern Norway are still running,” said strike leader Esben Glad from the union YS. “I challenge the emergency department of the Ministry of Justice to prepare for a shortage of gasoline and diesel. They have to ensure fuel for vehicles that are required to maintain life, health and personal safety,” said Glad.

-By Kjetil Malkenes Hovland, Dow Jones Newswires

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