OSLO, July 5 (Reuters) – Norwegian offshore workers began a strike on Tuesday that will cut oil and gas production, the union leading the industrial action told Reuters.
The strike, in which workers are demanding higher wages to offset rising inflation, comes amid high oil and gas prices, with supplies of natural gas to Europe particularly tight after the reduction of Russian exports.
“The strike has begun,” Audun Ingvartsen, the leader of the Lederne union, said in an interview.
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Operator Equinor (EQNR.OL) has initiated the closure of three fields in the North Sea following a strike, the company announced on Tuesday. Read more
The Norwegian Ministry of Labor reiterated that it was following the dispute “closely”. It can intervene to stop a strike if there are exceptional circumstances.
On Tuesday, oil and gas production will be reduced by 89,000 barrels of oil equivalent per day (boepd), of which gas production is 27,500 boepd, Equinor reiterated on Tuesday.
The strike on Wednesday will further reduce the country’s gas production to a total of 292,000 barrels of oil equivalent per day, or 13% of production, NOG said on Sunday, in line with Equinor’s estimate. Read more
Oil production from Wednesday will be reduced by 130,000 barrels per day, Equinor said, in line with the lobby’s previous estimate.
This corresponds to around 6.5% of Norwegian production, according to a calculation by Reuters.
A further escalation predicted by Saturday could see almost a quarter of Norway’s gas production shut down, as well as around 15% of its oil output, according to a Reuters calculation.
“The consequences of this escalation are not yet clear,” Equinor said.
It was ultimately the operator – Equinor – who decided to stop production.
PROGRESSION IN THREE STEPS
Industrial action began at midnight local time (2200 GMT) at three fields – Gudrun, Oseberg South and Oseberg East – and will expand to three more fields – Kristin, Heidrun and Aasta Hansteen – from midnight Wednesday.
A seventh field, Tyrihans, will also have to close on Wednesday as his exit is processed from Kristin.
By July 9, Sleipner, Gullfaks A and Gullfaks C would likely cease production as Lederne members are considered crucial to operations, with potential ripple effects on other fields that pump their product through these fields. .
If they did, it could cut production of crude and other petroleum liquids by an additional 160,000 boepd and natural gas production by nearly 230,000 boepd, according to a Reuters calculation.
Lederne union members on Thursday rejected a draft pay deal that had been negotiated by companies and union leaders. Read more
The other Norwegian oil and gas unions have accepted the wage agreement and will not go on strike.
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Additional reporting by Victoria Klesty, editing by Kim Coghill and Jason Neely
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