Norway's oil and gas production could be hit by a small strike this weekend if wage settlements fail, a union negotiator warned Friday, giving a foretaste of the impact possible industrial action could have later this month.
The threat of a strike and lockout at the end of this month have loomed over Norway's dominant export industry, which produces about 3.8 million barrels of oil equivalent a day, since initial talks failed in May. Unions warn of a conflict to keep their so-called "golden pensions," while the many giant international oil and gas companies operating Norwegian fields say they may retaliate with a lockout that could cut all exports and potentially force the government to end the dispute.
The first potential action, an indefinite strike by 114 union members in the well service company Baker Hughes Inc. (BHI), could begin midnight Saturday.
The strike could shut down several rigs and production facilities, hurting companies such as the Norwegian oil giant Statoil ASA (STO), Centrica PLC (CPYYY), Marathon Oil Corp. (MRO), Exxon Mobil Corp. (XOM), Royal Dutch Shell PLC (RDSA), Suncor Energy Inc. (SU) and Eni SpA (E), according to the Norwegian Oil Industry Association.
Negotiator Rolf Onarheim from the union Safe said Friday there was imminent danger of a strike this weekend, due to a disagreement with Baker Hughes, which changed the conditions for a group of Safe members after acquiring their company BJ Services in February.
If wage negotiations don't succeed by midnight June 23, a strike and lockout could start, closing most of Norway's oil and gas production, according to the Oil Industry Association.
Initial talks with offshore unions were unsuccessful due to disagreement about Statoil's ending an early pensions deal.
Three unions broke off negotiations May 22, and threatened to launch a strike involving 610 offshore workers, which would close the Oseberg and Heidrun platforms and cut around 7% of Norway's oil and gas production.
This week, the Oil Industry Association responded by notifying the National Mediator about a possible lockout of about 6,600 workers on the Norwegian continental shelf, but underlined that it took the same step in 2010 but didn't actually implement a lockout.
A full lockout would close most of Norway's oil and gas production and halt exports, according to Safe. If this happens, the Norwegian Parliament has the power to end strikes or lockouts by imposing compulsory arbitration.
"We are in deadlock," said Safe leader Hilde Marie Rysst, adding that she was disappointed by the employer's preparations for a potential full lockout. "We think that's irresponsible," she said.
The parties are scheduled to meet with the National Mediator for negotiations June 22 and 23. The unions demand the restoration of a discontinued Statoil deal that permitted workers to stop working at the age of 62 with full pension rights, but the oil industry is refusing to give way.
"Pensions are not part of these negotiations," said Oil Industry Association spokeswoman Eli Ane Nedreskar. "We want to leave that to the companies."
She said the worst possible outcome if talks failed was a full strike or lockout, "but we hope for a solution at the National Mediator."
Negotiations for the oil sector's land-based workers at oil and gas terminals and refineries such as Mongstad and Slagentangen, and gas processing plants such as Melkoya, crucial for exports, are on hold due to disagreements about early pensions. Their unions haven't signaled plans to strike here.