June 13, 2014 / 11:57 AM / 5 years ago

PREVIEW-Norway strike could cut oil output by 100,000 bpd

OSLO, June 13 (Reuters) - Norway’s oil production could be cut by around 7 percent from the middle of next week if trade unions representing oil workers fail to reach a wage deal and go on strike.

Two Norwegian trade unions will meet for mandatory mediation with industry representatives on Monday. If there is no deal by midnight on Tuesday, unions have threatened to shut several oil platforms on the Norwegian continental shelf operated by ExxonMobil and GDF Suez.

That could initially cut Norwegian oil production by about 100,000 barrels per day and gas production by 15 million cubic metres (mcm) per day, and may also be expanded at a later stage.

The petroleum sector accounts to more than a fifth of total gross domestic product (GDP) in the world’s seventh-biggest oil exporter and Western Europe’s top gas supplier.

So far this year, daily production has averaged 1.5 million barrels of oil, while current gas production is 240 mcm.

The Norwegian Organisation of Managers and Executives (Lederne) said it planned to put 76 workers on strike on the GDF Suez-operated Gjoea platform.

“This would basically shut the production there,” Sverre Simen Hov, a spokesman for the union, told Reuters.

Gjoea’s shutdown would also affect output from the nearby Statoil-operated Vega field, which has three subsea templates tied to Gjoea’s facilities, he added.

Data from the Norwegian Petroleum Directorate showed Gjoea produced 33,000 barrels of oil per day and 10.7 million cubic meters (mcm) of gas per day in 2013, while Vega’s output was 17,000 barrels of oil per day and 4 mcm of gas.

The Norwegian Union of Energy Workers (Safe) has said it planned to put 190 workers on strike at ExxonMobil’s Ringhorne and Balder fields in the North Sea, unless the talks succeed. A strike could also affect output from ExxonMobil’s Jotun field.

The fields produced about 50,000 barrels of oil per day (bpd) last year.

Safe’s plan to hit ExxonMobil’s facilities has been disputed at the Labour Court by the Norwegian Oil and Gas Association, which could ultimately delay the mediation, although the employers insisted the talks should take place as scheduled.

If the court upholds industry’s complaint, Safe will have to revise its plans and make a new notification, potentially affecting which fields and companies are hit in the event of a strike. Unions have to notify industry representatives about strike plans at least four days in advance.

Industri Energi, the biggest union for energy workers, reached a deal for oil workers’ pay to rise by 15,800 Norwegian crowns ($2,600) per year on May 9, on top of other supplements.

But two other unions walked out of the talks after their demands to incorporate pension rights in deal were rejected.

The unions have sought to incorporate pension provisions in the past, most recently in 2012, when 10 percent of Norway’s offshore workers went on strike for 16 days, cutting oil output by 13 percent and gas production by 4 percent.

The dispute ended when oil firms threatened a full lockout and the government stepped in to impose a deal. The strike helped push oil prices above $100 per barrel.

Another mediation between the unions representing workers at onshore supply bases is expected to take place on June 19-20, the oil industry said.

$1 = 5.9956 Norwegian crowns Editing by Terje Solsvik and David Evans

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