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Strike in Norway impacts gas production – exports fall

2022-07-05T05:41:19.368Z

Europe is concerned about the supply of fuel because of the severely curtailed deliveries from Russia. A strike by Norwegian oil and gas workers is likely to exacerbate the situation again.



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Oseberg oil and gas field platform: A quarter of Norway's gas production could be affected by the strike

Photo:

AP / Statoil

Only on Monday did the Norwegian government issue new permits for six offshore fields to satisfy the global hunger for gas.

Now, however, a strike by oil and gas workers is weighing on production.

"The strike has started," said Audun Ingvartsen, chairman of the Lederne union, on Monday evening.

Oil and gas production will be cut by 89,000 barrels of oil equivalent per day (boepd) as a result of the work stoppage, of which gas production will account for 27,500 boepd, said Norwegian energy group Equinor, formerly Statoil.

A planned phased production ramp-down through Saturday could result in nearly a quarter of Norway's gas production and about 15 percent of oil production being shut down.

According to the business newspaper "Dagens Næringsliv", the industry association Norsk Olje og Gass is already talking of a possible slump of 130,000 barrels of oil per day and for gas of 292,000 barrels of oil equivalent per day.

There is a risk of damage equivalent to a good 50 million euros a day.

The Scandinavian country is one of the largest gas suppliers for mainland Europe.

Oil and gas account for half of all Norwegian exports, and almost 200,000 people work in the industry for a population of just five million.

Last but not least, the money they generate feeds the state pension fund.

Employees ask for more money

According to the newspaper, just over 70 employees are initially involved in the current strike in the North Sea fields of Gudrun, Oseberg Sør and Oseberg Øst.

However, the union plans to expand to the Heidrun, Aasta Hansteen and Kristin fields, and more than a hundred other employees could then join.

The decision to cut production ultimately rests with the operator Equinor.

For EU countries there, the Norwegian oil and gas workers' strike comes at a sensitive time.

Due to the sharp reduction in supplies from Russia, they are increasingly dependent on gas from Norway.

In view of the war in Ukraine, Norway had announced that it would increase its output.

Germany recently covered about a third of its gas requirements from Norway.

The background to the strike is a wage dispute.

Lederne members had rejected a proposal for an agreement by a large majority. In view of the sharp rise in consumer prices in Norway, they are calling for a real wage increase.

The Norwegian government has said it is following the conflict "closely" and could end the strike in "extraordinary circumstances".

The Social Democratic Oil Minister Terje Aasland only approved increased gas production in several offshore fields on Tuesday.

"The most important thing Norway can do in today's challenging energy situation for Europe and the world is to support companies on the Norwegian continental shelf to maintain today's high production," Aasland said of the expansion.

However, the expected amount of gas that Norway wants to export in 2022 should not change overall.

Apr/Reuters

Source: spiegel

All business articles on 2022-07-05

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