Around 330,000 barrels of oil equivalent per day (boepd), or 8 percent of Norway’s oil and gas production, would be affected after a Norwegian workers’ union steps up a strike action on October 4, the Norwegian Oil and Gas Association (NOG) said on Friday.
NOG has been negotiating with trade unions representing offshore workers for weeks. The association and the trade unions were disagreeing over annual pay for offshore workers, and after failing to reach an agreement, the matter went to mediators.
The Norwegian Union of Industry and Energy Workers, Industry Energy, and the Norwegian Union of Energy Workers, Safe – representing 85 percent of the offshore workforce – have accepted a deal on the financial parameters, NOG said.
Yet, the smaller Lederne union has refused to accept the new terms, broke off negotiations on September 30, and 43 of its members went on strike at the giant Johan Sverdrup oilfield.
Lederne has said that it would escalate the strike on October 4.
As things look now, Equinor-operated oil and gas fields Kvitebjørn and its Valemon satellite, as well as Gudrun and Gina Krog, will have to shut down, the Norwegian Oil and Gas Association said on Friday.
Neptune’s Gjøa field will have to shut down as a result of the walkout. The same applies to its Vega satellite, which is operated by Wintershall Dea Norge.
The six fields in produce in total 330,000 boepd, while total oil and gas output from the Norwegian Continental Shelf (NCS) is about 4 million boepd.
“The risk therefore exists that about eight per cent of total petroleum production from the NCS could be lost through extending the strike,” the Norwegian Oil and Gas Association said.
Norway is currently reducing its oil production by the end of the year because of the slump in oil prices in March and April. In a bid to support global efforts to prop up oil prices and ease the glut, Norway has decided it would cut its crude oil production by 250,000 bpd in June, and then maintain a 134,000-bpd lower rate of production for the rest of 2020.
By Tsvetana Paraskova for Oilprice.com
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