Government keeps oil and gas flowing

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Labour Minister Hanne Bjurstrøm claims she had little choice but to step in during the night and head off an oil industry lock-out that would have halted the country’s offshore oil and gas production. Bjurstrøm ordered compulsory arbitration to end a labour conflict over pension benefits that already had disrupted production for more than two weeks.

Labour Minister Hanne Bjurstrøm headed off an oil industry lock-out in the North Sea and ordered compulsory arbitration in the industry's conflict with oil service workers. That means the workers look likely to lose early retirement benefits. PHOTO: Arbeidsdepartementet

Bjurstrøm harshly criticized the oil industry for threatening the lock-out, which would have shut down all offshore oil and gas installations and affected operations at terminals and refineries on shore. All told, nearly 7,000 oil industry workers would have been prevented from working, leaving many without pay or strike benefits, while the oil companies and the state reportedly would lose oil revenues amounting to as much as NOK 1.8 billion (USD 300 million) per day.

Bjurstrøm said that too many “innocent bystanders” would be affected by the lock-out but it was Norway’s reputation as a solid and stable supplier of oil and gas that was most at stake. As representative of a left-center government and from the Labour Party herself, Bjurstrøm was reluctant to take responsibility for a dispute that likely would leave the workers on the losing side, but she ended up giving the oil companies exactly what they wanted.

“It would have been irresponsible to let the conflict continue,” Bjurstrøm said shortly after midnight, when the lock-out was set to begin. But she also claimed the threatened lock-out was, in her opinion, an “irresponsible” move on the part of the oil industry, forcing her to step in and settle a conflict that she maintained the workers and their employers should have done on their own much earlier.

Everyone was blaming everybody else for the conflict that erupted when the oil industry, with Norwegian oil company Statoil as the biggest player, went along with demands for higher pay and more paid time away from work but refused to honor early retirement provisions that the oil platform workers had won several years ago. Three labour organizations called a strike on June 24 and pulled 708 of their members off the job.

The industry argued all along that they couldn’t meet the demands for full retirement benefits at age 62 because of new government pension reforms. The labour organizations scoffed at that position, and on Tuesday claimed they felt let down by the Labour-led government. That’s mostly because an arbitration panel is unlikely to address issues of principle like early retirement, leaving that to the employers, who collectively have rejected the pension demand.

Leif Sande of the organization representing the most workers, Industri Energi, claimed there were no grounds for Bjurstrøm to order tvungen lønnsnemnd (compulsory arbitration), and Labour’s biggest backer, trade union confederation LO, had claimed the same when urging the government to stay out of the conflict. Sande said there would have been no crisis if oil and gas deliveries were held up until the conflict was resolved.

The arbitration was ordered for fear of disruption in gas exports to Europe, Sande noted, “but there’s so much gas (already) that they could have swum in gas for many months,” he told Norwegian Broadcasting (NRK). He was bitterly disappointed that, in his view, the government took the side of the oil industry.

Bjurstrøm denied that, and criticized the industry and its representative on national radio Tuesday morning for resorting to the lock-out threat. Industry officials predictably denied that, leaving all sides pointing blame at the others.

The strike is estimated to have cost around NOK 3.2 billion in lost revenues during the 16 days that it lasted. Statoil and other companies involved reported Tuesday that they would now resume production at offshore installations that were shut down during the labour dispute.

Views and News from Norway/Nina Berglund

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