Norway restarts fields, no strike repeat for 2 years

OSLO Tue Jul 10, 2012 9:41am EDT

1 of 2. Oil workers are pictured as they work at the Oseberg oil field, in the North Sea, in this November 25, 2008 file photo.

Credit: Reuters/Marit Hommedal/NTB Scanpix/Files

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OSLO (Reuters) - Norway was restarting some key oil and gas fields on Tuesday after the government ordered to end a strike by offshore workers, still unhappy about pensions and retirement issues but unable to repeat the action for at least two more years.

"We are not going to give up, but now we have to wait another two years before we can take new actions legally," said Leif Sande, leader of Industri Energi, the biggest of the three unions who went on strike on June 24.

The strike had choked off some 13 percent of Norway's oil production and 4 percent of its gas output and pushed oil prices above $100 per barrel on fears of a full loss of supply from the world's eighth largest oil exporter.

About 10 percent of Norway's 7,000 offshore workers -- the best paid in the global oil industry - went on strike over retirement with full pensions at 62. Norway is also the world's second-biggest gas exporter by pipeline.

The employers threatened a complete shutdown of the entire Norwegian continental shelf, putting pressure on the government to intervene and force a settlement in the strategic industry.

The Norwegian government intervened late on Monday ordering staff back to work. The move helped ease supply fears with Brent crude trading $1.29 down on Tuesday at $99.03 per barrel at 0912 EDT.

"When the Norwegian government stopped the strike, it took control over negotiations. Now, the National Wages Board takes over to decide how much the unions will get, forcibly settling the dispute on behalf of the state," said Frank Aarebrot, Professor of European politics at Bergen University.

The relationship between the oil industry and the unions is based on a master agreement setting the ground rules for conduct during negotiations and strikes, with negotiations on salaries and other contract-related matters coming up every two years.

A forced arbitration will most likely take place in a few weeks.

A full closure of output in Norway would have cut off more than 2 million barrels of oil per day.

Gas operator Gassco said on Tuesday it expected its Oseberg field, a key area of production which has been shut since the start of the strike, to restart operations on Friday.

Oseberg is part of the North Sea dated Brent benchmark used as the basis for many of the world's trades.

Statoil, the biggest player on the Norwegian continental shelf, said it would resume production immediately.

"When the conflict now is over we are in the process of starting up production on the fields affected by the strike," Statoil spokesman Baard Glad Pedersen said. "We expect an initial startup period of one to two days, reaching full production within the end of the week."

(Reporting by Victoria Klesty, Vegard Botterli and Mia Shanley; editing by Dmitry Zhdannikov and Keiron Henderson)

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