Norwegian government ends offshore oil strike with compulsory arbitration

As was generally expected, the Norwegian government resolved Friday to impose compulsory arbitration on the industrial dispute over pensions and job security between two offshore unions and the Norwegian Oil Industry Association (OLF).

June 25, 2004

2 min read

By OGJ editors

HOUSTON, June 25 -- As was generally expected, the Norwegian government resolved Friday to impose compulsory arbitration on the industrial dispute over pensions and job security between two offshore unions and the Norwegian Oil Industry Association (OLF).

A bill by Norway's Council of State put an immediate end Friday to a strike by offshore workers that started June 17. As a result, the striking members of the two unions involved, the Federation of Oil Workers Trade Unions (OFS) and the Norwegian Association for Supervisors, must now return to work.

The OFS escalated the strike Wednesday, threatening to shut in 720,000 b/d of oil production and 30 million cu m of natural gas production. The OLF retaliated Thursday with plans for a lockout at all offshore facilities on the Norwegian continental shelf, effective late Monday.

That would have triggered an almost complete shutdown of production from the Norwegian continental shelf, which normally produces some 3.3 million b/d of oil and 7.3 bcfd of natural gas. The strike previously had shut in 400,000 b/d of production.

The threatened lockout by oil companies was generally viewed as a tactic to force the government to intervene in the strike. In a similar strike in 2000, the Norwegian government stepped in to compel arbitration, forcing strikers back to work after OLF announced it was planning a lockout.

The oil industry is the biggest revenue producer for Norwegian government. Coming in the current period of high prices, any prolonged shutdown would have a significant impact on revenues for both the government and oil companies (OGJ Online, June 24, 2004).