Norway's oil and gas output to be cut as offshore workers begin strike

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By Euronews  with Reuters
The Valhall oil field off the North Sea, Aug. 15, 2017.
The Valhall oil field off the North Sea, Aug. 15, 2017.   -   Copyright  Haekon Mosvold Larsen/NTB Scanpix via AP   -  

Norwegian offshore workers began a strike on Tuesday in a stoppage that will cut oil and gas output in the country, said the union leading the industrial action.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of gas to Europe especially tight after Russian export cutbacks.

Audun Ingvartsen, the leader of the Lederne trade union, confirmed to Reuters that the strike had begun. 

The union and the lobby representing oil companies said on Monday night that the negotiating parties had not made progress and that a strike was set to begin at midnight local time (0000 CET).

The strike will have "a substantial impact on gas exports," the Norwegian Oil and Gas Association said on its website. "About 13 per cent of Norway’s daily gas exports will be lost".

Equinor, the operator of the platforms, initiated a shutdown of three fields in the North Sea as a result of a strike, the company said on Tuesday.

Tuesday's stoppage at three fields — Gudrun, Oseberg South and Oseberg East — is due to be extended to three other fields — Kristin, Heidrun and Aasta Hansteen — from midnight on Wednesday.

A seventh field, Tyrihans, will have to shut because its output is processed from Kristin.

Lederne said on Monday it would further escalate the industrial action from July 9, taking workers on strike at three more platforms.

On Tuesday, oil and gas output will be reduced by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Equinor reiterated on Tuesday.

As the strike deepens from Wednesday, oil output will be cut by 130,000 barrels per day, Equinor said, confirming an earlier estimate.

Reuters estimates that this week's action corresponds to around 6.5% of Norway's production.

It means that close to a quarter of Norway's gas output could be shut by Saturday, as well as around 15% of its oil production.

The Norwegian government has said it was following the conflict "closely". It can intervene to stop a strike if there are exceptional circumstances.