Jul 05, 2012
State-owned energy company Statoil said the lockout will take effect Monday and "will halt all production" on Norway's continental shelf, where about 50 companies operate including BP and Royal Dutch Shell.
Table of Contents:
- Lockout Threatens to Halt Norwegian Oil and Gas Output
- <strong>Lost Revenue Equivalent to $87 Million per Day</strong>
- Will Government Intervene?
Norway's energy industry ordered a lockout next week that threatens to bring production to a halt in Western Europe's largest oil exporter and the world's No. 2 gas supplier.
The lockout was announced almost two weeks into a massive strike by more than 700 North Sea oil workers over pensions which, according to employers' organization OLF, has led to losses worth tens of millions of euros a day.
Crude prices rose on the news, which will halt production in the world's seventh largest oil exporter at a time when global supplies are already being hit by an embargo on Iranian oil.
State-owned energy company Statoil (IW 1000/32) said the lockout will take effect Monday and "will halt all production" on Norway's continental shelf, where about 50 companies operate including oil majors such as BP and Royal Dutch Shell.
Unions Call Action 'Cowardly'
Unions, which launched the strike on June 24, branded the Statoil action "cowardly" and insisted their demands were legitimate.
Analysts said the lockout could push the Norwegian government to step in to try to resolve the dispute, which the OLF said has caused lost revenue of more than 2.0 billion kroner (US$333 million).
"Unfortunately, we see no other course than to notify a lockout," OLF chief negotiator Jan Hodneland said in a statement, maintaining that the strike had led to some 1,000 employees in the supplies industry being laid off and was damaging Norway's reputation as a reliable supplier of oil and gas.
The lockout will mean that 6,515 workers covered by offshore pay agreements will not be permitted to enter their workplaces as of Tuesday, OLF said.
Statoil said it expected a shortfall in production of around 1.2 million barrels of oil equivalent per day.