OSLO, July 5 (Reuters) – Norwegian offshore workers began a strike on Tuesday that will reduce oil and gas output, the union leading the strike told Reuters.
The strike, in which workers are demanding higher wages to offset rising inflation, comes amid high oil and gas prices, with natural gas supplies to Europe particularly strained following Russian export cuts.
“The strike has started,” Audun Ingwartsen, leader of the Ledern union, said in an interview.
Sign up now for FREE unlimited access to Reuters.com
I am registering
Operator Equinor ( EQNR.OL ) has initiated the shutdown of three North Sea fields as a result of a strike, the company said on Tuesday. Read more
Norway’s labor ministry reiterated that it was following the conflict “closely”. It can step in to stop a strike if there are extraordinary circumstances.
On Tuesday, oil and gas production will be cut by 89,000 barrels of oil equivalent per day (boepd), of which gas production makes up 27,500 boepd, Equinor reiterated on Tuesday.
On Wednesday, the strike will deepen the cut in the country’s gas output to a total of 292,000 barrels of oil equivalent per day, or 13% of output, NOG said on Sunday, in line with Equinor’s estimate. Read more
Oil output will be cut by 130,000 barrels a day from Wednesday, Equinor said, in line with the lobby’s earlier estimate.
That corresponds to about 6.5 percent of Norway’s output, according to a Reuters calculation.
A further planned escalation by Saturday could shut down nearly a quarter of Norway’s gas output, as well as about 15 percent of oil production, according to a Reuters estimate.
“The consequences of this escalation are not yet clear,” Equinor said.
Ultimately, the decision to close the outlet rests with the operator – Equinor.
ESCALATION IN THREE STEPS
Industrial action began at midnight local time (2200 GMT) at three fields – Gudrun, Oseberg South and Oseberg East – and will spread to three other fields – Kristin, Heidrun and Aasta Hansteen – from midnight on Wednesday.
A seventh field, Tyrihans, will also have to close on Wednesday because its production is handled by Kristin.
By July 9, Sleipner, Gullfaks A and Gullfaks C are likely to cease production as the Lederne members are considered critical to operations, with potential ripple effects on other fields that pump their product through these fields.
If they do, it could reduce production of crude oil and other petroleum liquids by another 160,000 boe per day and natural gas production by nearly 230,000 boe per day, according to a Reuters estimate.
Members of the Lederne union on Thursday voted against a proposed wage deal that was negotiated by the companies and union leaders. Read more
Norway’s other oil and gas unions have accepted the wage agreement and will not strike.
Sign up now for FREE unlimited access to Reuters.com
I am registering
Additional reporting by Victoria Clesti Editing by Kim Cohill and Jason Neely
Our standards: The Thomson Reuters Trust Principles.
Add Comment