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Norway Oil Unions Break Off Wage Talks, Raising Strike Risk

May 9 (Bloomberg) -- Two of three Norwegian oil-worker unions broke off talks as employers refused to bargain over pensions, the issue that led to the offshore industry’s longest strike two years ago, raising the risk of a new walkout.

The unions, whose members account for less than half of the 7,615 workers covered by the negotiations, rejected the offer made by the Norwegian Oil and Gas Association, which represents companies such as Statoil ASA and Exxon Mobil Corp., the association said in a statement. Talks will now move to public mediation, where failure to reach a deal could lead to industrial action.

“A strike is looming if the Norwegian Oil and Gas Association intends to continue to just sit and say ‘no,’” Hilde-Marit Rysst, leader of the Safe union, said in a phone interview. “It’s important to show our members that we won’t give up easily.”

Industry Energy, a third union representing about 4,000 of the workers, accepted the offer.

The 2012 strike, which lasted 16 days and was the first by offshore oil workers since 2004, cut off about 15 percent of Norway’s oil production and 7 percent of gas output. The government of western Europe’s biggest producer used its power to stop the industrial action as companies threatened a staff lockout that would have halted about 12 percent of the continent’s crude output.

The still-unresolved row centered around an increase in the age at which staff can claim full company pensions.

Wage Increase

The negotiations cover workers at oil companies, some drillers and employees of catering companies supplying platforms. Workers were this year offered a general wage increase of 15,800 kroner ($2,680) and raises in other compensations.

“It’s regrettable” that Safe and the other union, the Norwegian Organization of Managers and Executives, refused the offer, the employer group’s main negotiator Jan Hodneland said in a statement. “We couldn’t accommodate their demands related to the inclusion of pensions in the collective-bargaining agreement.”

No date has been set for the mediation, which probably won’t take place before next month, Safe’s Rysst said. The unions can’t call a strike before the mediation has been completed, the Norwegian Oil and Gas Association said.

A strike this year could have as high an impact as the unanimous action in 2012 even with fewer unions, depending on which installations are hit and how many workers walk out simultaneously, the Safe union said. More than 10 percent of all workers went on strike in 2012 before the government intervened.

“We, too, would be able to paralyze the shelf without Industry Energy if that were to be the goal,” Rysst 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 Alex Devine, John Viljoen

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