Norway oil and gas workers’ strike could cut about 8% of output

By Gwladys Fouche and Terje Solsvik

OSLO (Reuters) -A planned strike among Norwegian oil and gas workers next week could cut the country’s overall petroleum output by around 8% unless a last-minute agreement is found over wage demands, a Reuters calculation showed on Friday.

The conflict over wages between oil companies and offshore platform employees could slash gas production by more than 10% at a time of high prices and tight supply in Europe.

Norway’s Lederne union, which on Thursday announced that its members had voted down a wage deal and would start a strike on July 5, said on Friday that the conflict would sharply escalate from July 6 if no bargain was made.

Provided that six fields are shut on the second day, as the union says is likely, the outage could amount to around 320,000 barrels of oil equivalent per day (boepd), some 8% of Norway’s petroleum output, a calculation based on official production data showed.

Of this, oil and condensate would see a reduction of about 130,000 barrels per day (bpd), or around 6.5% of output, while daily gas production would be reduced by 34.7 million standard cubic metres (mcm), equivalent to 10.6% of the total.

Some 74 Norwegian offshore oil workers at Equinor’s Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, Lederne said on Thursday.

They will be followed the next day by 117 workers at Heidrun, Kristin and Aasta Hansteen, the union said.

“I believe it will affect production,” Lederne leader Audun Ingvartsen told Reuters. Lederne represents mostly senior staff considered crucial to operations.

Operator Equinor said it was “too early to conclude” on the consequences of the strike escalation as it would take time to assess its impact.

The Norwegian government said it was following the conflict “closely”. It can intervene to stop a strike if there are exceptional circumstances.

Output

Earlier, Equinor told Reuters it would shut down production at the Gudrun, Oseberg South and Oseberg East fields off Norway if strike action starts on July 5.

“If there is a strike, we will shut down the three installations,” said an Equinor spokesperson.

The total petroleum production at Oseberg South, Oseberg East and Gudrun is 89,000 boepd, he said.

While Oseberg East and Oseberg South only produce oil, Gudrun produces both oil and gas. Gas output at the field is 27,500 boepd, or 4.4 mcm, Equinor said.

Ingvartsen, the union leader, said the union had a “good dialogue” with the Norwegian Oil and Gas Association (NOG), which represents employers.

“I am hoping that, with this serious situation, with such a large escalation, that we can talk over the weekend and that on Monday we can solve this,” he said.

“But there is no easy solution.”

(Editing by David Evans and Marguerita Choy)