Norway Union, Industrial Group Reach Agreement -Mediator

OSLO, Jun 22, 2005 (Dow Jones Commodities News via Comtex)

The Norwegian trade union for managers and supervisors, Lederne, has called off a strike that threatened to take out 1-million-barrels-a-day in crude production after reaching an agreement with the Norwegian Oil Industry Association, the state mediator told Dow Jones Newswires late Tuesday.

The union threatened to start the action at 2200 GMT if it didn't reach an agreement with the Norwegian Oil Industry Association over pensions, shift pay and older-employee benefits by the deadline.

The strike, which would have taken out 541 of the union's members from their positions on Statoil ASA (STO) platforms, threatened to cut 920,000 b/d of oil production and 210 million cubic meters of natural gas output capacity a day.

"We've called off the strike," said Tor Hæhre, deputy leader for the union.

Jan Hodneland, the oil industry's chief negotiator, indicated his satisfaction. "We're quite happy we managed to find a solution...there have been fairly tough discussions."

Jan Olavbrekke, president of the union, expressed relief. "I am relieved, it would have had quite a serious impact if we hadn't reached an agreement."

Norway is the third-largest crude exporter in the world, and traders said that the threatened strike helped push oil prices to a nominal high in New York and London Monday of nearly $59 a barrel.

A senior government official close to the matter earlier told Dow Jones Newswires that if the union decided to go ahead with a full-blown strike, the government would likely have intervened and forced arbitration.

July crude oil front month settled at $58.90, down $0.47 from Monday.

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