Norway Oil And Gas Workers To Strike On Tuesday, Cutting Output

Norwegian offshore workers will likely go on strike on Tuesday in a stoppage that will cut oil and gas output as the negotiating parties have not made progress, the union and the lobby representing oil companies said on Monday.

"As it stands now, there will be a strike tonight," a spokesman for the Norwegian Oil and Gas Association (NOG) told Reuters. "The situation is quite locked."

Industrial action will begin at midnight local time (2200 GMT) at three fields - Gudrun, Oseberg South and Oseberg East - and will then expand at three other fields - Kristin, Heidrun and Aasta Hansteen - from midnight on Wednesday.

A seventh field, Tyrihans, will have to shut because its output is processed from Kristin.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of gas to Europe especially tight after Russian export cutbacks.

The Lederne union said on Monday it would further escalate the industrial action from July 9, taking workers on strike at the Sleipner, Gullfaks A and Gullfaks C platforms.

"As things stand now, it looks like there will be a strike," Lederne union head Audun Ingvartsen told Reuters.

By Tuesday, oil output would be cut by 89,000 barrels of oil equivalent per day (boepd) and gas output by 27,500 boepd, or 4.4 mcm per day, Equinor has said.

By Wednesday, a strike would cut the country's gas output by 292,000 barrels of oil equivalent per day, or 13% of output, NOG said on Sunday.

Oil output would be cut by 130,000 barrels per day, the lobby added, corresponding to around 6.5% of Norway's production, according to a Reuters calculation.

By July 9, Sleipner, Gullfaks A and Gullfaks C would likely stop producing, as Lederne members are senior workers considered essential to production, with potential ripple effects on other fields which pump their product via those fields.

If they did, it could reduce the output of crude and other oil liquids by another 160,000 boed and natural gas output by close to 230,000 boed, according to a Reuters calculation.

Close to a quarter of Norway gas output would thus be shut by Saturday, as well as around 15% of its oil production.

Equinor, the operator of the platforms, was not immediately available to comment on the impact of the latest escalation.

GOVERNMENT

The Norwegian government has said it was following the conflict "closely". It can intervene to stop a strike if there are exceptional circumstances.

Ingvartsen, the union leader, said the latest escalation was not a way to pressure the government to intervene and impose a settlement. He had not been touch with the government, he said.

"Our goal is that employers engage with us and listen to their employees," he told Reuters.

Members of the Lederne trade union, who represent senior workers, on Thursday voted down a proposed wage agreement that had been negotiated by companies and union leaders.

Norway's other oil and gas labour unions have accepted the wage deal and will not go on strike.

(Editing by Nora Buli, Louise Heavens, William Maclean and David Evans)