UPDATE 1-Norwegian oil services workers break off wage talks

Fri Aug 24, 2012 12:14pm EDT

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* State mediation required before strike can be called

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OSLO, Aug 24 (Reuters) - Norwegian oil services workers broke off wage talks with oil companies on Friday, taking the sector a step closer to its second strike within two months and leaving government mediation as the next formal step in the dispute.

The talks had resumed after a three-month break on Thursday and the breakdown increases the likelihood of labour action as early as the second half of September.

"The parties in the oil services negotiations have formally ended negotiations," Per Inge Grimsmo, an official at the Industri Energi trade union, said. "We hope we will talk again before the mandatory negotiations (with) ... the state mediator."

Norway, the world's eighth-largest oil exporter, produces around 2 million barrels a day of oil, natural gas liquids and condensate. The country is also Europe's second-biggest gas supplier. Top oil producers off Norway include Statoil, Shell, ConocoPhillisp, Eni and BP .

Norway's vital oil sector was hamstrung last month when production workers held a 16-day strike over pay and the right to early retirement.

The strike cut oil production by 13 percent and natural gas production by 4 percent. Work resumed only when the government intervened after oil firms threatened a lock out employees.

Although oil workers are not allowed to strike again within a two-year period, services workers were not part of the previous labour action so the limitation does not apply to them.

Services workers are now demanding conditions similar to those enjoyed by offshore workers who work less for better pay.

"We feel that we presented a good offer with 4 percent annual wage growth and increased compensation for working nights and holidays," Eli Ane Nedreskaar, a spokeswoman for the Norwegian Oil Industry Association, said. "We hope that negotiations at the state mediators will resolve these issues."

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