June 17, 2010 / 6:09 AM / in 7 years

UPDATE 3-Norway workers, oil firms land wage deal, avert strike

* Wage deal reached after several days of negotiations

* Deal averts strike, potential supply problems in North Sea

* Deal includes general wage increases for 6,700 workers

* Gas prices up, supply disruption offsets relief from deal

(Adds market reaction)

By Richard Solem and Mia Shanley

OSLO, June 17 (Reuters) - Norwegian offshore oil workers agreed a wage deal with energy companies on Thursday, averting a strike that had threatened production in three oil and gas platforms in the North Sea.

British spot gas prices rose in early Thursday trade despite the strike being cancelled, with tightening supply from a large Norwegian pipeline offsetting the potential restriction in gas output if the strike had gone ahead.

“There will be no strike,” Nils Dalseide, arbitrator for Norway’s National Arbitration Tribunal, told Reuters after talks that have dragged on since the start of this week.

Gas for Thursday delivery was trading at 46.40 pence per therm at midday, up 1.5 pence compared to closing within-day contracts in the previous session, according to one broker.

“Despite the strike being off, gas prices rose this morning as the strike fears were replaced by supply fears over Langeled,” a Norway based gas trader said.

Gas flows via Langeled dropped to 30 million cubic metres a day (mcm/day) from 45 mcm/day, which equates to around six percent of Britain’s Thursday gas demand being removed.

Around 400 workers on the Gullfaks B and Gullfaks C platforms, operated by Statoil (STL.OL), and Shell’s (RDSa.L) Draugen field had planned to strike from Thursday if no agreement was reached over pay.

Jointly, the Gullfaks and Draugen fields produce about 270,000 barrels of oil per day, out of Norway’s daily exports of roughly 2 million barrels. They also produce natural gas.

Gullfaks C has, however, been shut since May 20 due to a fault. [ID:nLDE6570WM]


“We feel relieved that we could avoid a strike in the oil sector,” Leif Sande, President of Industri Energi union, said. “We did not get everything, but we got a good wage increase and better compensation. We were very satisfied with this.”

The Norwegian Oil Industry Association (OLF), which represents the employers, said on its website the agreement included a 10,000 Norwegian crown ($1,573) annual increase in general wages for some 6,700 workers as well as 4,700 crowns from a previous pay deal.

The biggest concern was that if the workers had gone on strike, the operators could have tried to force a settlement by threatening a lockout to keep the strikers from working. That could have been extended to all 6,700 employees covered by the Norwegian Shelf Agreement in a worst case scenario.

Norwegian governments have intervened in previous North Sea labour conflicts, imposing a settlement to prevent disruptions in oil and gas output because of energy’s importance to the economy.

Oil and gas production accounts for half of Norwegian exports, about a third of tax revenues and a quarter of GDP.

($1=6.357 Norwegian Crowns)

Addition reporting by Henning Gloystein and Kwok W. Wan in London; Editing by Dan Lalor and Keiron Henderson

Our Standards:The Thomson Reuters Trust Principles.
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