UPDATE 3-Norway oil talks fail, strike could last weeks-union

Wed Jul 4, 2012 3:29pm EDT

* Second round of union, industry negotiations fail

* Owners of Oseberg cargoes asked to defer shipments

* Conflict over pensions has cut oil production by 13 pct

By Nerijus Adomaitis and Vegard Botterli

OSLO/LONDON, July 4 (Reuters) - An 11-day strike in Norway's oil sector, w hich has slowed shipments from the world's eighth-largest exporter, could drag on for weeks, a labour union said on Wednesday after a second round of talks with employers failed to produce a deal over pensions.

Oil prices have risen this week back above $100 per barrel, as the strike has cut Norway's oil production by around 13 percent and as traders said on Monday that exports of at least one tanker had been delayed.

Labour unions plan to meet on Friday to decide whether to escalate the strike, hitting more oil fields.

The leader of the SAFE trade union, one of the three main unions negotiating, s aid the unions were prepared to strike for "weeks."

"For us, the strike can continue for a very, very long time. We have the full support from our members," S AFE leader Hilde-Marit Rysst t old Reuters.

On Wednesday, traders said Norwegian state-controlled oil firm Statoil had asked other owners of cargoes with the key Oseberg crude grade to defer more shipments, potentially giving further impetus to global oil prices.

"People have just been asked if they can load later. They haven't issued new dates on the programme yet," one of the trade sources said.

Statoil had no immediate comment.

In addition to oil shipments, the wrangle has cut daily Norwegian gas output by around 4 percent, but gas exports to Europe have remained largely unaffected.

" W e have tried to find a solution for many hours, but we failed, and it' s really a serious situation for the whole industry," Gr o Braekken, head of the Norwegian oil industry association (OLF), told reporters at the end of talks.

The government has the authority to force an end to strikes if it believes safety is being compromised or vital national interests could be harmed, and have done so in the past to protect the country's image as a reliable gas exporter.

Oil firms have the option of declaring a lockout for all workers involved in the talks, threatening a complete shutdown of Norwegian oil and gas production and virtually guaranteeing government intervention.

The OLF's Braekken declined to speculate whether the industry would go for a lockout.

" We want to finish the strike ," she said. " It ' s the loss for the society and the companies, and we can't continue this way."

OUT OF LINE

Wage talks broke down on June 24 after the OLF refused to negotiate an early retirement scheme for the sector's 7,000 workers.

Unions had demanded wage increases, better overtime pay and the right to retire at 62, but the OLF has refused to negotiate pensions, arguing the demands were not in line with the aim of a government pension reform.

The strike has shut five Statoil-operated oil and gas fields on the Norwegian continental shelf, including the Oseberg and Heidrun fields. Oseberg is part of the North Sea Brent oil benchmark used as the basis for many of the world's trades.

"We heard that they (Statoil) are offering deferrals but have not fixed specific dates yet," said the second trading source.

Oseberg crude is exported from the Sture terminal near Bergen in Norway. Sture has crude storage tanks able to hold 6.3 million barrels, according to Statoil's website. It was not clear how full the tanks were when production was cut.

If full of crude from Oseberg, storage could in theory supply more than a month's exports. The July Oseberg loading programme originally listed seven cargoes of 600,000 barrels each, amounting to 4.2 million barrels.

"I think they've got enough stock for the first part of the programme and it's just a case of spreading things out a little bit," said the first trading source.

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