Norwegian Government Ends Strike

by Jon Mainwaring

Rigzone Staff

Tuesday, July 10, 2012

The strike among Norwegian oil industry workers was brought to an end Monday night by the Norwegian government half an hour before midnight, when workers were due to be locked out of their workplaces. Oil firms that operate in the country are now preparing to resume production.

After three lengthy meetings at the country's national mediator failed to find a resolution to the dispute, Hanne Bjurstrøm, Norway's Minister of Labor, summoned the unions and employers' representatives to her office at 11.30 p.m. Monday (local time) and declared that the dispute was over. There will now be a compulsory arbitration process to work out a new pay agreement.

Jan Hodneland, chief negotiator at the Norwegian Oil Industry Association (OLF), said in a statement Tuesday that employers were relieved that they did not have to shut down production on the Norwegian continental shelf (NCS). "However, we were ready to initiate a lockout if the government did not intervene," he added.

The three energy sector unions involved in the strike have been demanding wage increases, better overtime pay and the right to retire at 62 for the sector's workers but the employers see these demands as excessive, with Hodneland pointing out on Monday that the average pay for a Norwegian oil company employee amounts to around $163,000 per annum.

Norway's SAFE union described the government's intervention as "disappointing", calling it "totally unnecessary" and that it had "hoped and believed that Bjurstrøm had enough guts to resist" the employers.

"This confirms that the oil industry once again can order compulsory arbitration by threatening to shut off the [NCS]," Leif Sande and Hilde-Marit Rysst, both senior figures in the SAFE union, said in a joint statement Tuesday.

Norwegian oil and gas major Statoil announced that it is preparing to resume production at installations that have been affected by the strike. Installations operated by the firm that were affected included: Oseberg Field Center, Oseberg South, Oseberg East, Oesberg C, Heidrun, Huldra, Veslefrikk and Brage.

Statoil said that it may take up to two days to get production restarted at these installations.

The strike lasted for 16 days and, according to OLF, cost the Norwegian oil sector around $500 million.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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