The Norwegian government has forced a last-minute settlement between energy companies and unions, ending a dispute that risked shutting down its entire oil and gas industry.
Ministers intervened only 30 mins before industry body OLF formally locked all 6,500 offshore workers, a move set to halt all 2m boe/d of production on the Norwegian continental shelf. The government declared that the closure could pose a threat to the country’s national interest, and ordered the group into arbitration with a collection of unions representing offshore workers.
Hanne Bjurstrøm, the Norwegian minister of labour, says that “it would be irresponsible to let the conflict continue.”
“The […] lockout would have led to a complete stop in the oil and gas production on the Norwegian continental shelf in the North Sea,” she adds. “This could have very serious consequences for the trust to Norway as a reliable supplier of oil and gas.
“A lockout would also have major economic consequences for the Norwegian society, and unfortunate consequences for Norwegian industry.”
A coalition of unions had been leading strikes for around two weeks when OLF declared the lockout and had already reduced Norway’s overall production, costing it an estimated NOK3.1bn (US$510m). The country is one of the world’s biggest oil producers, and supplies around 20% of Europe’s gas. It is also deemed one of the most reliable and safe major exporters, with news of a possible break in production sending oil prices shooting up over the past few days.
The dispute stems from an on-going row over pension and early retirement schemes for offshore workers, with the unions fighting a move that would delay full pension rights by three years – until workers were 65. The OLF, however, maintains that the move would simply bring the profession in line with most others in Norway. It argues that there should be no special industry-wide dispensation for offshore workers, which it says are already among the best-paid in the country.
OLF’s chief negotiator, Jan Hodneland, says that the government made “a responsible choice” by forcing the conflict into compulsory arbitration. He adds, however, that “we were ready to initiate a lockout if the government did not intervene.”
The unions have reacted angrily to the decision, and say that threatening a lockout was “an abuse of power” that held all of Norway hostage.
“We had hoped and believed that Bjurstrøm had enough guts to resist OLF’s game,” says energy workers’ union SAFE. “This confirms once again that the oil industry can force compulsory arbitration by threatening to shut off the shelf, and thus escape the real negotiations and legal disputes offshore.
“How can we fight for our demands and our conditions when employers can create compulsory arbitration every time it’s hotting up?”
State-owned oil company Statoil was set to be badly affected by the dispute, and had estimated its potential losses at around NOK520m/d. The company says it is now preparing to resume production at all eight of its operations that had been been hit by the strikes, and hopes to be back to full capacity within a week.
