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Norway oil and gas workers end strike as government steps in

Commodities Jul 05, 2022 04:02PM ET
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2/2 © Reuters. FILE PHOTO: Equinor logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo 2/2

By Gwladys Fouche, Nora Buli and Victoria Klesty

OSLO (Reuters) -The Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output, a union leader and the labour ministry said, ending a stalemate that could have worsened Europe's energy supply crunch.

Norwegian offshore oil and gas workers went on strike over pay on Tuesday, the first day of planned industrial action that had threatened to cut the country's gas exports by almost 60% and exacerbate supply shortages linked to the Ukraine war.

"Workers are going back to work as soon as possible. We are cancelling the planned escalation," Lederne union leader Audun Ingvartsen told Reuters. Asked whether the strike was over, he said: "Yes".

The labour ministry separately confirmed it had exercised its right to intervene.

"Norway plays a vital role in supplying gas to Europe, and the planned escalation (of the strike) would have had serious consequences, for Britain, Germany and other nations," Labour Minister Marte Mjoes Persen told Reuters.

"The volume impact would have been dramatic in light of the current European situation."

By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe), or 56% of daily gas exports, while 341,000 of barrels of oil would have been lost, the Norwegian Oil and Gas (NOG) employers' lobby said.

In a worst case scenario, Belgium and Britain would not have received any piped Norwegian gas from Saturday, gas pipeline operator Gassco had said, because of the risk of a shutdown at Sleipner, a gas transportation hub in the North Sea.

Oil and gas from Norway, Europe's second-largest energy supplier after Russia, is in high demand as the country is seen as a reliable and predictable supplier, especially with Russia's Nord Stream 1 gas pipeline due to shut for maintenance from July 11 for 10 days.

British wholesale gas price for day-ahead delivery had leapt nearly 16% on Tuesday, though the price of Brent crude fell as fears of a global recession outweighed concerns about supply disruption, including the strike in Norway. [O/R]

FORCED SETTLEMENT

The Norwegian government has the power to intervene in strikes under certain circumstances.

Such powers have also previously been used to end petroleum sector strikes, to protect Norway's reputation as a reliable gas supplier to Europe.

"We are glad to see that the government understood the seriousness of the situation and acted to uphold Norway's reputation as a reliable and stable supplier of natural gas to Europe," NOG, the oil lobby, said in a statement.

Like workers elsewhere, Lederne union members had been concerned about accelerating inflation eroding their wages, though they are among the best paid employers working offshore Norway.

Last week, they had turned down a pay rise of between 4% and 4.5%, negotiated by union leaders and oil companies. Inflation in May stood at 5.7% year-on-year.

Under the forced settlement by the government, workers will receive the same terms as the two other oil unions that had neogiated deals with employers, though the specifics will be agreed at a later stage, said Ingvarsten, the union leader.

Norway oil and gas workers end strike as government steps in
 

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Comments (6)
Stavros Ga
Stavros Ga Jul 05, 2022 7:19AM ET
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As they should. What central bankers are doing is completely self-deprecating to capitalism and our economies. They started looking at recessions and demand destruction to meet low supply of everything, instead of focusing on how to increase supply in the first place, to maintain our economies' prosperity. And europe should cope with higher costs as well if they want stable and predictable parters as the article states. They bought natural gas at dirt cheap prices and the risks of that materialized. You can't have both predictability and buy everything at a low cost.
Zenaida Ballettotl
Zenaida Ballettotl Jul 05, 2022 7:19AM ET
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yes
Lake Lot
Lake Lot Jul 04, 2022 8:00PM ET
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I know a lot of good Norwegians, guess this group does not include them ! Pay them in Rubles!
Lake Lot
Lake Lot Jul 04, 2022 7:57PM ET
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They should not be supported when they hold the country hostage . Many of us are working to help a chalkenging situation . It would be like walking out on anything . Not ok
Rod Quasney
Rod Quasney Jul 04, 2022 7:49PM ET
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What were their wages when Oil went negative, or say $20, $30, $40, $50 a barrel? Did they take a pay cut? Do they have any financial responsibilities in regards to the Company? Oil Companies lost Billions of dollars recently. The Companies shouldn't be allowed to recover financial? How quickly people forget! Are the Companies being greedy, or the employees?
Benoit Avril
Benoit Avril Jul 04, 2022 7:49PM ET
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It's not because of the oil price, it's because they are losing purchase power with inflation. Is it hard to understand?
G D
G D Jul 04, 2022 7:49PM ET
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Republicans aren't known for being smart
Matt Skinner
Matt Skinner Jul 04, 2022 7:49PM ET
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Benoit Avril when you make the main cause of inflation and then stop wkrking you now make way way more inflation. Seriously europe is a joke. They would be as poor as africa if they hadnt stolen everything 100s of hears ago. The way to cuase less inflation is to have a recession not to give more money. Lol econ 101
Zenaida Ballettotl
Zenaida Ballettotl Jul 04, 2022 7:49PM ET
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Matt Skinner then is good to to invest on IGT to earn money
Maria Kenny
Maria Kenny Jul 04, 2022 3:38PM ET
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💩
CS Greer
CSGreer Jul 04, 2022 2:39PM ET
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Of course they are. What better time to strike than when prices are already sky high?
John Berry
John Berry Jul 04, 2022 2:39PM ET
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Workers should get some of the pie too. CEOs are lining their pockets why not the workers too
vince smith
vince smith Jul 04, 2022 2:39PM ET
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They are workers if they pool their money together and buy the equipment, insurance, health benefits, taxes etc then they can have some of their own pie. Until then they are payed for a job and they should do it. Its a simple trade your work this money.
Benoit Avril
Benoit Avril Jul 04, 2022 2:39PM ET
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I just remind you. Your simple brain doesn't make the laws, and the laws don't agree with your ideas. Strike is legal, they are using it to get their cut. And they already pay for what you listed, if there wasn't those payments, the wages could be higher.
 
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