Norwegian Government Steps In to End Offshore Workers' Strike

A labor dispute nearly derailed up to half of Norway's gas production this week, just as the nation's oil firms were ramping up output to meet urgent European demand. Norway's government stepped in Tuesday to halt the strike and order the union back to work, citing the extreme impact that the shutdown would have on the energy market. 

The strike affected senior employees, managers and technical staff represented by the union Lederne. Last week, these critical offshore workers voted down a pay raise package of 4-4.5 percent - a deal which other offshore unions had already accepted - and opted to go on strike. 

The labor action started Monday at three fields, Gudrun, Oseberg South and Oseberg East. On Wednesday, it would have expand to cover Aasta Hansteen, Heidrun, Kristin and Tyrihans. By the end of the week, the strike would have rolled out to Gullfaks C, Gullfaks A and Sleipner, which will also force closure at Kvitebjoern, Utgard, Sigyn, Gugne and Gina Krog. 
 
By Wednesday, the nation's gas output would have dropped by nearly 300,000 boepd - about 13 percent, according to industry association Norwegian Oil and Gas. Oil output would have fallen by about 130,000 bpd the same day, restricting supply in an ultra-tight global market. If the planned rollout had been fully carried out through the end of the week, it would have taken out more than half of Norwegian gas production, NOG said. Europe gets about 25 percent of its gas from Norway's offshore sector, and with Russia cutting down its gas exports ahead of the winter heating season, European customers are more dependent on the Norwegian supply than ever.

Norway's labor ministry stepped in Tuesday to put an end to the strike, and Lederne agreed to return to work. 

"The announced escalation is critical in today's situation, both with regards to the energy crisis and the geopolitical situation we are in with a war in Europe," Labour Minister Marte Mjos Persen said. "It is unjustifiable to allow gas production to stop to such an extent that this strike in the next few days is estimated to lead to."

It is the second time in weeks that Persen has been forced to step in and end a labor dispute. An aircraft technician strike in Norway grounded hundreds of flights in June, and Persen ultimately ordered a return to work, citing the hazard to healthcare patients who need air transport.