Norway intervenes to avert oil industry closure

Tue Jul 10, 2012 2:35am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Vegard Botterli and Nerijus Adomaitis

OSLO (Reuters) - Norway's government ordered on Monday a last-minute settlement in a dispute between striking oil workers and employers in a move to alleviate market fears over a full closure of its oil industry and a steep cut in Europe's supplies.

The strike over pensions had kept crude prices on the boil with analysts expecting far quicker action by the government to stop the oil industry from locking out all offshore staff from their workplaces from midnight (2200 GMT) on Monday.

Oil markets breathed a sigh of relief on news of the intervention and crude prices dropped in early Asian trade.

Under Norwegian law, the government can force the striking workers back to duty and has done so in the past to protect the industry on which much of the country's economy depends.

But it was slow to intervene in the latest dispute, which was in its third week, and did so on Monday only minutes before the start of the lockout, citing potential economic consequences.

"I had to make this decision to protect Norway's vital interests. It wasn't an easy choice, but I had to do it," Labour Minister Hanne Bjurstroem told Reuters after meeting with the trade unions and the Norwegian oil industry association (OLF).

A full closure of output in Norway - the world's No. 8 oil exporter - would have cut off more than 2 million barrels of oil, natural gas liquids (NGL) and condensate per day.

But the minister said her main concern was the potential cut in gas supplies. Norway is the world's second-biggest gas exporter by pipeline, with the majority of supplies going to Britain, the Netherlands France and Germany.   Continued...

Gro Braekken (L), head of the Norwegian oil industry association (OLF), Leif Sande, leader of Industri Energi and Norway's Minister of Labour Hanne Bjurstrom, who has asked for parties of the conflict within the oil sector to return to the negotiating table, are pictured after their meeting in Oslo in this picture taken on July 6, 2012 and released to Reuters on July 9, 2012. REUTERS/Aleksander Andersen / NTB scanpix