Norwegian Oil-Strike Threat Rises as Union Breaks Off Wage Talks

Norwegian onshore oil workers became the latest in the industry to break off pay negotiations with employers, increasing the risk of a strike two years after western Europe’s biggest producer suffered its longest walkout.

The Industry Energy union, representing 3,900 of the 5,000 onshore workers at companies like Statoil ASA (STL) and BP Plc, (BP/) ended discussions yesterday, the lobby for the industry said. Three other unions sought more time to study the employers’ offer, the Norwegian Oil and Gas Association said in a statement.

Negotiations with Industry Energy, the largest union, will move to public mediation, where failure may result in a strike.

The latest breakdown follows the industry’s inability to achieve full or part deals in three separate discussions with workers on offshore platforms, supply bases and at oil-service companies. The strike over pensions two years ago cut Norwegian output and led to employers threatening a staff lockout until the government used legal measures to intervene in the dispute.

“It’s very regrettable that yet another collective-bargaining agreement will go to mediation,” Jan Hodneland, the employers’ chief negotiator, said in the statement. “It’s clear that the unions’ expectations for this year’s negotiations have been very different from the employer side’s.”

Platform Workers

Talks with the two unions for platform workers, Safe and the Norwegian Organization of Managers and Executives, will go to mediation June 16 and 17. Failure to reach a deal would lead to strikes, according to the unions, cutting off about 50,000 barrels of oil a day at Exxon Mobil Corp. (XOM)’s Ringhorne, Jotun and Baler fields, and 28,000 barrels of oil and 11 million cubic meters of gas a day at GDF Suez (GSZ)’s Gjoea field.

The figures are based on the fields’ output in March reported to the Norwegian Petroleum Directorate. A strike on the Gjoea platform would also cut off output from Statoil’s Vega field that goes through Gjoea. Vega produced about 22,000 barrels of oil a day in March, according to the directorate

Mediation for the supply-base negotiations is set for June 25 and 26, Industry Energy Deputy Leader Frode Alfheim said by phone today. Oil-service mediation is due July 4 and 5. No date has been set for the onshore workers, though Industry Energy hopes it may be scheduled for within the month, Alfheim said.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Tony Barrett, John Viljoen

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