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Hundreds of Norway oil workers go out on strike, Shell shuts one field

Reuters  |  OSLO 

By Fouche and Lefteris Karagiannopoulos

OSLO (Reuters) - Hundreds of workers on Norwegian offshore and gas rigs went on strike on Tuesday after rejecting a proposed wage deal, leading to the shutdown of one Shell-operated field and helping send Brent crude prices higher.

One union said hundreds more workers would join the strike on Sunday if an agreement over union demands for a wage increase and pension rights was not reached.

said that due to the strike it was temporarily closing production at its Knarr field, which has a daily output of 23,900 barrels of mostly oil, but also liquids and

is Western Europe's biggest and the disruption added to rising global supply outages and helped push Brent crude prices up 1.2 percent to $79.03 per barrel, following a 1.2 percent climb on Monday amid concerns about global supplies.

The output of Norway's biggest Equinor, formerly known as Statoil, was not affected by the strike so far, the company said, even though it was shutting down drilling operations at its platform.

Shortly after a midnight deadline passed, a state-appointed said talks between two trade unions, Safe and YS, and the Shipowners' Association, representing the rig employers, had failed to reach a deal.

"The parties were so far apart from each other there was no point presenting a proposal that could be recommended to both sides," said in a statement.

WAGES, PENSION RIGHTS

The Safe union wants pension rights to be the same for everyone regardless of whether an employee is new to a company or has many years of experience.

It also wants wages for drilling workers to match those of workers for oil companies, which are higher.

The Norwegian said Safe was asking for a 50,000 Norwegian crown ($6,224) salary increase for unskilled workers, equivalent to about 8 percent of the current wage levels.

The of the Safe union said she did not recognise the figures presented by the

Around 670 workers would walk out from Tuesday, with an additional 901 employees joining them from midnight on Sunday if the dispute is not resolved, Safe said in letters to the on Tuesday.

In total, up to 2,250 workers could join the action, it said.

Norway's directly employed 50,700 workers in 2017, of which 26,700 worked in production and 23,500 in related services, according to Statistics

It was the biggest strike affecting the sector since a 16-day industrial action in 2012 cut the country's output of crude by about 13 percent and its production by about 4 percent.

NOT TALKING NOW

Talks between the two striking Norwegian unions and rig employers will not resume for a few days, the of Safe, Hilde-Marit Rysst, told

"We have no contact with the employers yet. It will take some days at least before we hear from them ... If they want to contact us they will probably reach out to us before the bigger strike on Sunday," Rysst said.

The Shipowners' Association, representing the employers, said it was keen to resolve the situation.

"We have no scheduled contacts as of now but we have every will to seek a solution," Jakob Korsgaard, for the Shipowners' Association, told "The effect of a strike like this is substantial financially."

Industri Energi, the union which represents the majority of Norwegian oil drilling workers, concluded a wage deal earlier this year with the Shipowners' Association and is not on strike.

OUTPUT IMPACT

Safe said 106 workers from the ship operating at Shell's Knarr field would walk out initially.

pumped 1.97 million barrels of oil and a day in 2017, according to data from Statistical Review published in June.

was 123 billion cubic metres last year, reported, making Norway the world's seventh biggest and Europe's largest after

Safe said workers on rigs that conduct exploration or production drilling for would also walk out on Tuesday.

That includes 117 workers from the Spitsbergen rig; 80 from the Enabler; 71 from Odfjell Drilling's Deepsea Stavanger; and 60 from North Atlantic Drilling's West Elara rig, among others.

Others set to join the action include 40 Archer drilling workers on the platform operated by Equinor; 67 from COSL working on the COSL Innovator rig; 50 from Island Offshore, a supply vessel firm; and 59 from the MODU drilling working on the Askeladden rig.

The employees that could walk out on Sunday work on exploration and production drilling rigs owned by Saipem, Transocean, Songa Offshore, Odfjell Drilling, Archer and COSL, among others.

Some catering workers will also be striking, Safe said.

($1 = 8.0331 Norwegian crowns)

(Editing by Christian Schmollinger/Mark Potter/Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 18:00 IST
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