Norway: government expected to step in promptly to stop strike image

The situation is critical in Norway, and the Norwegian government is expected to step in promptly to stop strike, union leaders, analysts and company executives said Friday.

One union head said a government move was now all but inevitable.

A shutdown from Tuesday next week would have a major impact on oil markets in the already skittish climate.

The strike, which began on June 24, has already slowed crude exports and cut Norway’s oil production by around 13 percent and its gas output by around 4 percent.

Brent dropped $1.03 to $99.67 by 0907 GMT. U.S. crude shed $1.18 to $86.04.

“I think it will be very likely that something happens today,” said Thina Saltvedt, an oil analyst at Nordea.
“It will be very likely, because of the consequences.”

State-controlled Statoil said the lockout would cause a production shortfall for the company of around 1.2 million barrels of oil equivalent (boe) per day and 520 million Norwegian crowns ($86.6 million) in lost revenues per day.

Thus far, a little more than 10% of the 6,500 workers that are covered by the offshore-wage agreement have actually been pulled off the job as a result of the strike, which began June 24.

Statoil said it was planning a “controlled shutdown of production” on the shelf, which would take between one and four days, and that it would transport employees to the mainland starting midnight Monday.

“An appropriate level of safety staffing will be established on each installation,” it said.