* 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 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
"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
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
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
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
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.