October 5, 2020
By Nerijus Adomaitis and Terje Solsvik
OSLO (Reuters) – Six Norwegian offshore oil and gas fields were shut on Monday as more workers joined a strike over pay, companies and union officials said.
The strike will cut Norway’s total output capacity by just over 330,000 barrels of oil equivalent per day, or about 8% of total production, according to the Norwegian Oil and Gas Association (NOG).
The dispute began on Sept. 30 when a group of 43 workers organised by the Lederne union went on strike after wage talks failed between the union and the NOG, which represents oil and gas companies.
Monday’s escalation added 126 union members to the strike, taking the total to 169 out of the 1,003 offshore workers Lederne represents.
Norway regularly pumps just over 4 million barrels of oil equivalent per day, half in the form of crude and other liquids and half from natural gas, making it a major global energy supplier.
Equinor <EQNR.OL> said it had closed four of its fields, while the Lederne trade union said two fields operated by Neptune Energy and Wintershall Dea were also shut.
Output from Johan Sverdrup, the North Sea’s largest producing oilfield, was unaffected by the strike, Equinor said.
Neptune and Wintershall were not immediately available for comment.
“There is no solution in sight,” said a spokesman for the NOG.
“Employers are still showing no willingness to meet our demands, thus triggering the escalation,” Lederne trade union chief Audun Ingvartsen said in a statement.
The shut downs helped to boost global oil prices on Monday, with Brent <LCOc1> rising 4.0% by 1207 GMT.
The strike hit Equinor’s Gudrun, Gina Krog and Kvitebjoern fields, as well as Kvitebjoern’s satellite Valemon field, and also Neptune’s Gjoea field and its Vega satellite field, operated by Wintershall Dea.
Close to 60% of the cuts were natural gas, with crude oil and natural gas liquids making up the rest, a Reuters calculation based on official Norwegian output data showed.
In July, the combined crude oil output from the six fields that were shut on Monday stood at 79,000 barrels per day, while natural gas production amounted to 194,000 boepd, according to Norwegian Petroleum Directorate (NPD) data.
Natural gas liquids from the six fields amounted to about 62,000 barrels per day, the data showed.
Lederne said it was seeking better financial terms for members and wanted the offshore wage agreement to also cover workers at onshore remote control rooms.
Equinor and other oil companies have been looking into ways to remotely control production at offshore fields, to cut costs.
The NOG said Lederne’s demand fell outside the scope of the offshore wage agreement.
(Additional reporting by Nora Buli, Editing by Clarence Fernandez and Jane Merriman)