Conflict May Shut Norway Oil Fields

By Doug Mellgren, Associated Press, Monday 19 June 2000, 2:19 PM ET

OSLO, Norway (AP)—Norway's oil company association on Monday threatened to shut down oil production by locking out more than 2,600 union members in an ongoing labor conflict over retirement ages.

Norway, which produces roughly 3.2 million barrel per day, is the world's second largest oil exporter after Saudi Arabia. The association said the lockout would shut down the fields at midnight Friday unless a settlement is reached.

The conflict began on June 10 when the Norwegian Federation of Oil Unions and an affiliated union ordered 183 members to strike, shutting down one field which produces 225,000 barrels per day.

Last week, the union stepped up the action by ordering 25 members to join the strike Wednesday on the Ekofisk Bravo platform, which is operated by Phillips Petroleum and produces about 50,000 barrels per day.

In response, the Norwegian Oil Industry Association on Monday announced a lockout of all 2,640 members of the two unions on member companies' offshore oil installations.

Hugo Sandal, chairman of the employers association, said the lockout and strike would effectively shut down the nation's oil and natural gas flows. Previously, the Norwegian government has been quick to order strikers to resume work if stoppages badly disrupted the oil industry.

Minister of Municipalities Sylvia Brustad said the government will follow the situation, out of concern for Norway's reputation as a dependable oil and natural gas supplier.

It is clearly serious when a total stop in the North Sea is announced, said Brustad, who is responsible for labor relations. There are a lot of considerations, and we will go through them before reaching a decision.

The union said it had been restricting the extent of the strike to guard against an order to return to work.

We assume the government will follow international principles on collective bargaining as it has promised, said Terje Loden of the union.

The unions are demanding the option of early retirement for members who are age 57 or older. Under the current contract, offshore oil workers can retire at age 63, four years younger than the national legal retirement age.

The union says offshore work is so tough that older staff should be allowed to retire earlier. Employers claim there is not enough difference between offshore and mainland jobs to warrant such a low retirement age, calling it a matter of principle.

The employers association said the conflict would cost about $90 million per day in lost production, and that it would hit all major operators on the Norwegian shelf, including the Norwegian state oil company Statoil, Norsk Hydro, BP Amoco, Elf, Esso, Norske Shell, and Phillips Petroleum.

Sandal said there had been sporadic contacts between the unions and the employers, but no progress had been made in solving the conflict.