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Strike lockout to shut Norwegian oil and gas production

09 July 2012

Negotiations between Norway's oil workers and employers over pay and pensions failed for a third time on July 8. The strike has already cut Norway's oil production by about 13% and gas output by 4%, and all production could come to an end from July 10 when employers say they will lock out all striking workers.

Hilde Marit Rysst, leader of the union SAFE, claims that the lockout is an 'abuse of power and an over-reaction'
Hilde Marit Rysst, leader of the union SAFE, claims that the lockout is an 'abuse of power and an over-reaction'

Offshore workers walked out 13 days ago over demands for early retirement at 62 years of age. This has raised concerns in the industry, with Norway already paying the world's highest oil and gas salaries, double those of similar workers in Britain. 

The dispute escalated on July 5 when Norway's oil industry association, OLF , announced plans to lock out all 6,500 workers on the Norwegian continental shelf from July 10. This will effectively shut down all of the country’s oil production. Norway is the largest oil producer in Europe, with an offshore capacity of around 2m BOE per day.

The stoppages are set to lose the industry around US$300m a day in lost revenue. The Oslo government could force an end to the strike but a Labour Ministry spokesman said there were no immediate plans to intervene in the dispute. 

“Offshore workers rank among the country’s best-paid professions,” said Jan Hodneland, chief negotiator for OLF. “The conflict is deadlocked and the demands are unreasonable. As a responsible player we must use the only weapon we have to help end the situation, and that’s a lockout.”

“We feared this,” said SAFE union leader Hilde-Marit Rysst. “OLF and the oil companies are taking advantage of Norway's reputation as a reliable energy supplier to try to stop a legal dispute.”

"We are trying to keep spirits high despite the lockout. We are currently engaged in the process of ensuring that the shutdown happens in a secure and controlled way," Rysst told newswires.

Norway is the largest natural gas exporter in western Europe and the world’s eighth-largest exporter of crude, with oil & gas accounting for half of its total exports.

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