August 19, 2022

Norwegian oil and gas production drops as workers go on strike

  • The strike will gradually increase during the week
  • A raise is the employer’s way of asking to be heard – the union
  • Gas production could be reduced by almost 25% by Saturday
  • Government can intervene in special circumstances

OSLO, July 5 (Reuters) – Norwegian offshore oil and gas workers went on strike over pay on Tuesday, the first day of planned industrial action that could cut the country’s gas production by nearly a quarter and widen supply shortages after Ukraine. War.

According to a Reuters calculation, 15% of Norway’s oil production could be cut by Saturday, based on plans by union members to gradually increase their activity in the coming days. read more

Demand for oil and gas from Norway, Europe’s second-largest energy supplier after Russia, is high as the country is seen as a reliable and predictable supplier, especially as Russia’s Nord Stream 1 gas pipeline is scheduled to shut down for 10 days starting July 11.

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British wholesale gas prices rose nearly 16% for supplies earlier in the day, despite falling Brent crude prices as fears of a global recession outweighed fears of supply disruptions, including a strike in Norway.

“The strike has started,” Audun Ingvartsen, head of the Lederne union, said in an interview, adding that the union would escalate the strike to pressure employers to address demands for wage increases to offset rising inflation.

A three-step increment

The Norwegian Labor Ministry reiterated that it was following the dispute closely. In exceptional circumstances the government can intervene to stop any strike.

Union leader Ingvardsen said the expansion was not designed to pressure the government to step in and impose a solution, adding that he was not in touch with the government.

“Our goal is for employers to engage with us and listen to their employees,” he said.

On Tuesday, oil and gas output will be cut by 89,000 barrels of oil equivalent per day (boepd), including gas output by 27,500 boepd, Norwegian oil and gas company Equinor said. (EQNR.OL) said.

On Wednesday, the strike will increase gas cuts to a total of 292,000 boepd, or 13% of output, Equinor and employers’ association Norwegian Oil and Gas (NOG) said. read more

Oil production will be cut by 130,000 barrels per day from Wednesday, they said. According to a Reuters calculation, this is about 6.5% of Norway’s oil production.

A further planned increase by Saturday could put nearly a quarter of Norway’s gas production offline and about 15% of its oil output, according to a Reuters calculation.

The NOG has yet to fully study the effects of Saturday’s planned expansion, a spokesman for the lobby group said on Tuesday, adding that many sectors could be affected.

“The consequences of this expansion are still unclear,” Equinor said.

Leathern represents senior offshore workers, who are considered critical to operations and where industrial action in one sector can have a ripple effect on others, pumping oil and gas through the affected sector.

More domains at risk

The industrial action began at midnight local time (2200 GMT) in the three fields of Gudrun, Ösberg South and Ösberg East, and will extend to the three fields of Christine, Heydrun and Austa Hänstein from midnight on Wednesday.

A seventh field, Tierihans, must be closed on Wednesday as its output is processed by Christ.

By July 9, the Sleipner, Culfox A and Culfox C fields will have to shut down production due to strike action at other fields pumping oil and gas.

If they were also shut down, it could reduce Norway’s production of crude and other oil liquids by another 160,000 boepd and natural gas production by 230,000 boepd, according to a Reuters calculation.

Lederne union members on Thursday rejected a proposed wage deal negotiated by companies and union leaders. read more

Norway’s other oil and gas workers unions have accepted the wage agreement and will not go on strike.

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Additional reporting by Victoria Clesti; Editing by Kim Coghill, Jason Neely and David Clarke

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