Norwegian Oil Industry Workers Shutdown Wells as Negotiations Fail to Progress

The negotiations over pensions and wages between the Norwegian Oil Industry Association (NOIA) and trade unions Industry Energy, SAFE, and Lederene have failed to reach an agreement, despite a government-led mediation.

Following up on threats made last week the oil industry workers have now started the four to five day shutdown procedure at Statoil ASA’s Oseberg and Heidrun platforms, as well as delaying the opening of BP plc’s new Skarv well.

Jan Hodneland, the chief negotiator for the NOIA, said that “completely unreasonable pension demands from Industry Energy, SAFE and Lederne show they are clearly placing themselves apart from other workers in Norway.”

Although Leif Sande and Hilde-Marit Rysst the leaders of the Industry Energy and SAFE unions, see it a different way, stating, “we can’t accept that the employers rob us of our pensions.”

Around 700 workers will go on strike from the wells, reducing Statoil’s production level by about 165,000 barrels of oil per day, and costing BP and estimated $25 million dollars a day of lost revenue from its Skarv site. Also, due to a loss of natural gas supplies, all output will cease from Europe’s largest methanol plant, the Tjeldbergodden plant.

Expect more strikes if the negotiations continue to show little sign of progressing; strikes which could affect start to effect other nations in Europe due to disruptions in oil production and supply.

By. Charles Kennedy of Oilprice.com