North Sea physical prices have been high this month, as demand for the light, sweet varieties of crude, which are easy to refine, has been healthy. Dated Brent-Forties-Oseberg, the benchmark against which two-thirds of world oil supply is priced, was assessed by Platts as reaching a record high Wednesday of $47.45 a barrel.
While current production will be cut by a total of 55,000 b/d at the Glitne and Varg fields, the strike will also delay development drilling at Ekofisk, Oseberg, Troll, Valhall and Statfjord fields, preventing planned production of a further 150,000 b/d.
"Based on the price of oil over the relevant period and the loss of future income, the real loss will be equivalent to approximately half the value of the lost oil production," the shipowners said.
The union says they are striking over job security, with rig owners hiring contract workers outside the country.
"The rigs are filled with foreign contractors at the same time there are several hundred jobless ex-Norwegian workers," said Bjoern Tjessem, deputy leader of the Federation of Oil Workers' Union.
With no plans to sit down at the negotiation table, he says the strike could last well into the new year: "It's deadlocked."
Many analysts say government intervention is the only way end the strike, but without a major threat to production - as seen in another strike earlier this year - they see intervention as unlikely.
"I don't expect the government to intervene," agreed Lenning, "According to the (labor) minister, the conflict will have to have an effect on the health of the economy."
The government Wednesday announced next year's production level is supposed to peak at 3.3 million b/d, but if the strike continues well into 2005, then that level could be significantly reduced.
Companies affected by the strike include Statoil, Norsk Hydro, Transocean, Odfjell, Dolphin, PGS and Smedvig.
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