One of Norway’s three main oil worker unions threatened labor disruptions unless the government does something to prevent job losses in western Europe’s largest crude producer.
“The country’s political authorities need to arrive on the scene with measures to stem the escalating trend of dismissals and layoffs,” the SAFE union said in a statement on its website. “This call will be followed by a significant political strike if measures aren’t enacted to lift activity on the shelf and for associated oil service companies.”
Political strikes typically last as many as eight hours and usually don’t lead to lost production, Hilde-Marit Rysst, the leader of SAFE, said by phone.
Oil producers and service providers such as Statoil ASA and Aker Solutions ASA have been cutting jobs to cope with plunging oil prices and surging costs. The decline is threatening growth in Norway, which relies on its offshore riches for about 22 percent of economic output. Crude has dropped $43 from a June high and is now trading at about $72.
SAFE said about 7,000 jobs have been lost over the past few months and that the development risks hurting the broader economy if the government doesn’t act. The union urged the state to use its 67 percent stake in Statoil, Norway’s largest producer, to make the company concentrate on developing Norway’s offshore industry.
“Oil companies have stopped or postponed several profitable projects because the returns aren’t large enough,” the union said. “This type of behavior is unacceptable.”
An oil boom over the past decade has stoked growth in Norway, keeping unemployment below 3 percent even as other parts of Europe suffer double-digit joblessness.
Finance Minister Siv Jensen has signaled that the central bank is better equipped than the government to address short-term disruptions from oil prices. Her ministry already plans to spend a record amount of oil money next year, equivalent to 6.4 percent of the mainland economy.
Norway “has experience in dealing with this kind of volatility” and “it’s too soon to judge whether prices will remain where they are now,” Jensen said this week in an interview in parliament. The government is sticking to a growth forecast made in October, she said.