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Some Norwegian oil workers to strike from July 5, hitting 4% of oil output

Economy Jun 30, 2022 23:24
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© Reuters.

By Gwladys Fouche and Terje Solsvik

OSLO (Reuters) -Seventy-four Norwegian offshore oil workers at Equinor's Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, the Lederne trade union said on Thursday, likely shutting about 4% of Norway's oil production.

The announcement by Lederne, the smallest of Norway's three oil workers' unions and which mostly represents senior staff considered crucial to operations, follows a vote by its members to reject a wage deal negotiated with oil companies.

Lederne, which negotiates on behalf of 1,300 members, said the planned strike would have virtually no impact on gas output, at a time of tight supply in Europe, because the affected platforms almost exclusively produce oil.

Lederne could gradually involve more members in strike action.

"Our members are key personnel that control production, so when they are taken out on strike, it would be normal for the employer to shut down the platforms," union leader Audun Ingvartsen told Reuters.

Equinor was not immediately available to comment.

Gudrun produced 45,700 barrels of oil equivalent per day (boed) in 2021, while Oseberg East produced 5,600 boed and Oseberg South 32,000 boed - together accounting for about 4% of Norway's oil output, official data shows.

WAGE TALKS

Lederne negotiated a deal this month with the Norwegian Oil and Gas Association (NOG) but sought approval from members before any formal endorsement.

Some 57% of voting members rejected the wage deal, with 67% of trade union members voting, said Ingvartsen.

They turned down a pay rise of between 4% and 4.5%, compared with a hike of 3.7% agreed under a framework deal between Norway's main employee and employer organisations in April, which sets the benchmark for sector wage talks in Norway.

Since then, inflation in Norway has accelerated, rising to 5.7% in May year-on-year. The statistics agency now expects prices to rise 4.7% in 2022, up from the 3.3% it predicted in March.

It was unclear whether the state-appointed mediator, which led the talks previously, could be involved as he is currently mediating talks to avert strike action at Scandinavian carrier SAS.

Still, the union and employers' lobby can negotiate without the mediator present, Ingvartsen said, adding he talked with his counterpart on Thursday and would seek further discussions before beginning the strike.

UNIONS

Members of a separate union, Safe, have accepted the deal, the mediator said. Norway's third oil union, Industri Energi, signed off on an agreement this month.

NOG said it was "astonished" union members rejected the deal. "Members of the union are the best paid on the NCS," it said in a text to Reuters, referring to the Norwegian Continental Shelf.

Norway pumps just over 4 million boed, half in the form of crude and other liquids and half natural gas, making it a major global energy supplier.

In 2020, Lederne called a strike that cut Norway's output by around 330,000 boed, or about 8% of oil and gas production, split roughly 60% for natural gas and 40% for oil.

During that 10-day strike, a last-minute bargain between Lederne and oil firms prevented an escalation that would otherwise have raised the outage to one million boed.

Some Norwegian oil workers to strike from July 5, hitting 4% of oil output
 

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