Statoil ASA Prepares to Halt Production Following Notice of Lockout

Statoil ASA announced that it has started preparing to shut down production on the Norwegian continental shelf (NCS) following a notice of lockout. The Norwegian Oil Industry Association (OLF) announced that a lockout will be imposed on all members of Industry Energy (Industri Energi), the Organization of Energy Personnel (SAFE) and the Norwegian Organization of Managers and Executives (Lederne) who are covered by the offshore pay agreements. The lockout will start on July 9, 2012 at 24:00, and will halt all production on the NCS. For Statoil, the shortfall in production will be around 1.2 million barrels of oil equivalent per day. The Group's lost revenue resulting from the stoppage will amount to around NOK 520 million per day. Statoil is planning a controlled shutdown of production and return of personnel to land from July 9, 2012. It will take from one to four days to shut down all production on the NCS. Safety staffing will be established on each installation. The lockout warning follows strike action taken by Industri Energi, SAFE and Lederne on June 24, 2012. In the warning, OLF underlines that in addition to pay rises, the trade unions demand an early retirement scheme from the age of 62. The early retirement scheme is a demand that cannot be met by OLF because each individual company determines its own pension scheme. Since it has not been possible to negotiate a settlement, OLF has found it necessary to respond to the strike by announcing a lockout warning.