Norway Oil Worker Talks Hold 6% of Production in the Balance

(Bloomberg) - Norway is facing the first oil worker strike since 2012 as government-mediated talks for platform workers approach a Friday midnight deadline.

Should the talks fail, more than 700 workers will walk off the job, affecting fields run by Exxon Mobil Corp.,  Engie SA and Wintershall as well as drilling operations at Statoil ASA. About 6 percent of the oil and gas output in western Europe’s largest producer will be halted, according to the Norwegian Oil and Gas Association.

“Persistently low oil prices and a high level of costs are contributing to the reduction in offshore investment and activity,” the employers’ association said in a statement Thursday after mediation began. “In these circumstances, employers and employees have a common responsibility to help safeguard jobs and valuable expertise in an industry which Norway will be needing for a long time to come.”

Should a strike materialize, output at fields such as Balder, Gjoea and Vega will see production cut, according to the group. While the walkout will include KCA Deutag Drilling Norway AS employees on Statoil ASA platforms, including on Oseberg and Gullfaks, Statoil will maintain production even as drilling operations halt, Morten Eek, a spokesman for Norway’s largest oil company, said on Wednesday.

The Safe, Industry Energy and Lederne unions gave notice that they stand ready to start industrial action that will affect about 229,000 barrels of oil equivalent a day of output if employers try to eat away at workers benefits.

“We naturally want mediation to succeed, so that conflict can be avoided,” Safe said in a statement on Monday. “However, if the national mediator is unable to get the parties to agree, the strike will be a fact from that point forward.”

The nation’s petroleum producers and oil service companies have fired more than 30,000 workers to cope with the worst crude slump in a generation. The central bank has cut its benchmark interest rate to a record low and signaled it’s prepared to ease policy further to ward off a recession. That may well see unions and employers be more amenable to an agreement than in previous years.

“The room for maneuver is narrower now than it was a few years ago,” Thina Saltvedt, an oil analyst for Nordea Bank AB said on Thursday. “They’re trying to cut costs. It’s not an easy situation to be in to require more from the companies when they’re already pushed to the end.”

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net To contact the editors responsible for this story: Veronica Ek at vek@bloomberg.net Jonas Bergman

Copyright 2016 Bloomberg News.

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