Norway Union Threatens 1M B/D Oil Strike

Oseberg South - Norwegian North Sea
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OSLO Jun 20, 2005 (Dow Jones Commodities News Select via Comtex)

The Norwegian trade union for managers and supervisors Monday said it would start a 1 million barrel a day oil strike late Tuesday if a resolution over pensions isn't reached with the Norwegian Oil Industry Association by then.

The Lederne union said negotiations began Monday over pensions, shift pay and older-employee benefits, but little headway had been made.

"There's been no solution so far, they've just exchanged point of views," Deputy leader Tor Haehre told Dow Jones Newswires.

Union head Jan Olav Brekke said if no progress is made in the talks, the organization's 541 members working for Statoil ASA (STO) would take industrial action 2200 GMT Tuesday.

Statoil-operated platforms on the Gullfaks, Statfjord, Heidrunn, Kristin, Kvitebjeorn, Norne, Sleipner, Troll, Veslefrikk, Aasgard, Snorre and Visund fields would be hit.

Haehre said the union hadn't yet decided whether a gradual escalation or full blown strike would start Tuesday night.

Historically, the government has intervened - forcing arbitration and an end to industrial action - when substantial volumes of oil and gas output were threatened. Norway is the third-largest crude exporter in the world, shipping out around three million barrels a day.

Inger Pettersen, head of the work and environment department at the Labor and Social Affairs Ministry, said the government was, "following the development closely, but has no part in the deliberations."

"The question of state intervention has not yet been discussed," she added.

The Oil Industry Association, or OLF, said the strike would cut around 920,000 b/d and up to 210 million cubic meters of gas a day.

At 1358 GMT, front month Brent crude contracts on the International Petroleum Exchange in London were trading up 35 cents at $58.10/bbl.

OLF chief negotiator Jan Hodneland said negotiations "are probably going to be difficult," especially over pensions. "It's difficult to negotiate lower pensions when you have all the new reforms taking place," he said, referring to government pensions reforms proposals, which include the pushing up of the retirement age.

"I hope we'll be able to reach an agreement," Hodneland said, "that's our goal." He said it was too early to say whether Lederne would try to force government intervention at an early stage by taking out all production at once, or by gradually turning up the pressure with escalated cuts.

Deputy leader Haehre said: "I hope we get a resolution before it becomes a strike, and we will work as hard as possible to get an agreement.... We just hope the OLF comes to the table with the same attitude."

"But if there is no solution, we could easily stop all (Statoil's) production," he said.

(C) 2005 FWN Select. All Rights Reserved

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