Home / World Business
Mon, Jun 21, 2004 - Page 12 News List

Oil-workers' strike slashes Norway's output 10 percent

BLOOMBERG

A Norwegian oil-workers' strike that's cutting daily output from the world's third-largest oil exporter by more than 300,000 barrels entered its third day yesterday with little chance of a resolution, the nation's oil industry association said.

"For the moment the situation looks deadlocked," said Leif Harald Halvorsen, a spokesman for the oil-industry association, which represents the employers in the dispute.

"It's impossible to say how long the strike will last," he said.

More than 200 members of the OFS and Lederne unions stopped work early Friday morning, after negotiations failed to yield an agreement over pension plans and the use of temporary workers. They plan to expand the strike on Wednesday, bringing the cut to 450,000 barrels a day. Norway normally pumps 3 million barrels daily.

Resolving the conflict will be difficult because a third oil-workers' union, Nopef, already accepted an agreement over the same issues, the unions and employers have said.

The two striking unions have received the same offer as Nopef, said Halvorsen.

Output at Statoil ASA's Snorre and Vigdis fields ceased around midday on Friday after shutdown procedures were completed, Kristofer Hetland, a spokesman for the Stavanger-based oil company, said in a telephone interview. The closures correspond to a revenue loss of about US$10.9 million a day at current oil prices.

Crude oil futures Friday climbed to their highest in two weeks amid concern violence in the Middle East and the strike in Norway will disrupt supplies of crude. The price of Brent crude for July delivery has gained 20 percent this year, closing at US$36.21 a barrel on the International Petroleum Exchange in London on Friday.

Other fields affected by the conflict are Exxon Mobil Corp's Ringhorne, which will have to shut Wednesday if the strike continues.

The Bravo and Kilo platforms at ConocoPhillips's Ekofisk are in the process of shutting down.

The strike will cost producers more than 100 million kroner (US$14.5 million) daily, the Norwegian Oil Industry Association has said.

Norway is the world's third-largest oil exporter after Saudi Arabia and Russia. A strike in June 2000 closed down output of some 285,000 barrels of Norwegian oil a day. The government stopped it after less than two weeks, when oil companies threatened a lockout of 2,600 workers.

This story has been viewed 2448 times.
TOP top