Norway oil pay talks fail again, shutdown looms

Reuters News
Posted: Jul 08, 2012 5:13 AM
Norway oil pay talks fail again, shutdown looms

By Nerijus Adomaitis

OSLO (Reuters) - Negotiations between Norway's offshore oil workers and employers over pay and pensions failed for a third time on Sunday, risking a total shutdown of oil and gas production from Tuesday, both sides involved in the talks said.

The Norwegian oil industry association (OLF) and labor unions said they still could not agree on an early retirement option for about 7,000 offshore workers, the main sticking point in the dispute.

"The strike goes on. This is a very serious situation," Jan Hodneland, OLF's chief negotiator, said after 13 hours of talks, which ended early on Sunday morning.

The government has the authority to force an end to a strike if it believes safety is being compromised or vital national interests could be harmed.

A spokesman for the labor ministry, in charge of monitoring the labor conflict, told Reuters on Sunday it had no immediate plans to intervene in the oil strike, which began on June 24.

The strike has already cut Norway's oil production by about 13 percent and its gas output by about 4 percent and affected crude shipments from the world's No. 8 oil exporter.

Norway is the second biggest gas supplier to Europe after Russia with most gas going to Britain, Germany and France.

SAFE, one of the trade unions involved, said it had no plans to go back to negotiations, unless OLF makes an offer, and wanted to the government keep out of the dispute.

"Hopefully they (the Labour ministry) will keep away and let the OLF sweat. It's up to OLF to clean up this mess," SAFE leader Hile-Marit Rysst said.

An OLF spokeswoman also said the group had no plans to speak to the unions again on this matter.

"That was the last try (to negotiate). I don't want to speculate what the government can do, but they have the means to end it (strike) rapidly," Eli Ane Nedreskaar told Reuters.

The unions said in a statement that government-imposed compulsory arbitration would be seen as an abuse of wage bargaining rights.

Norway has been criticized by the International Labour Organization for using compulsory arbitration frequently in the past, and is more cautious about using this power as a result.

Also, the Labour-led coalition government faces elections next year, and is keen to preserve its relationship with the unions - major electoral allies.

Demands to allow all offshore workers to retire at 62 with full pensions were excessive, as they were already one of the best paid professions in the country, with a standard retirement age of 67, the OLF said.

The dispute escalated on Thursday after Norway's oil industry association, OLF, said it would lock out all offshore workers from July 10.

Norway's Labour Minister Hanne Bjurstroem on Friday summoned the parties to a meeting during which she asked them to resume mediated talks but refrained from forcing striking offshore oil and gas workers back to work.

Markets hope that the government will step in the end to prevent any major supply disruptions as the Conservative-led government did in 2004, just one day after the oil industry called a lockout.

(Editing by Louise Ireland)