More than 300 offshore oil service workers were called out on strike Wednesday, amidst reports that nearly 38,745 jobs in their sector have disappeared in the past two years. The workers’ union nonetheless deemed a strike necessary, claiming they couldn’t accept “a dirty deal” offered by employers’ organization Norsk Olje og Gass.
The tone between the two sides was unusually tough Wednesday morning, given Norway’s tradition of otherwise civilized labour disputes. The head of the employers’ organization, former top Labour Party politician Karl Eirik Schjøtt-Pedersen, accused the labour organization Industri Energi of lacking solidarity in a troubled time for the oil and gas business.
“At a time when nearly 40,000 people have lost their jobs in the oil industry and the companies are evaluating more staff cuts, Industri Energi calls a strike to get much higher pay increases than all other groups in Norway have received,” Schjøtt-Pedersen, chief executive of Norsk Olje og Gass, railed on NRK’s national radio newscasts Wednesday morning. “It’s completely irresponsible. You can’t even believe it’s possible.”
Schjøtt-Pedersen claimed that the oil service companies he represents in the labour negotiations made a pay offer “completely in line” with what other industrial workers have received in Norway. He noted that another union representing oil workers, Safe, accepted the offer last summer. Industri Energi has not been willing to accept it and has questioned the legality of the mediation that led to Safe’s acceptance.
“Safe has accepted a dirty deal that we can’t accept,” the leader of Industri Energi, Leif Sande, told NRK. “We want to raise the pay for our professional offshore workers. The dispute is both about pay and the way it’s built up.”
Strike shows disagreement also between labour unions
Ommund Stokka, a regional leader for the Industri Energi union, added that Norsk Olje og Gass had “not shown any willingness to negotiate” terms for oil service workers in the North Sea. He claimed the employers had “forced a weak labour union” (Safe) into accepting an agreement that is not in line with demands “and that we’re not satisfied with.”
Industri Energi, Stokka claimed, “cannot accept that a small union like Safe, with 600 members, shall dictate (terms) for 6,000 Industri Energi members in an oil service agreement.” His comments portrayed tensions not just with the employers’ organization but with a fellow labour organization as well.
Companies affected in the first phase of the strike by around 310 members of Industri Energi include Schlumberger, Baker Hughes, Halliburton, Oceaneering and Oceaneering Asset Integrity. The strike began at 7am Wednesday and will mainly affect the environmental handling of drilling waste, which can lead to a halt in some drilling operations. NRK reported that the conflict will not immediately affect any oil production.
“In this first phase, we’re pulling a limited number of members off the job,” a secretary of Industri Energi, Einar Johannessen, told news bureau NTB, “but the strike will spread if necessary.”
Striking despite a still-gloomy outlook
The strike comes just a day after DNB Markets, the brokerage and analytical arm of Norway’s biggest bank DNB, released a report showing that 38,745 people have lost their jobs in the Norwegian oil industry since oil prices fell in 2014. Several firms are still cutting back, with Norske Shell announcing that it will cut another 255 jobs and both Aker Solutions and FMC Technologies cutting back again as well. The ripple effects are wide, with the helicopter company CHC that shuttles workers to and from offshore oil rigs also warning that 120 more people will lose their jobs.
Stockbroker Truls Oma Erichsrud of DNB Markets has been following the situation closely and calculated the figure showing nearly 40,000 out of work so far. “I’m afraid many of the jobs lost will never come back again,” Erichsrud told newspaper Dagens Næringsliv (DN) on Tuesday. “Work that earlier demanded 10 people will now be replaced by new technology.”
Erichsrud cited several reasons for why oil service companies are continuing to cut staffing: “There’s very little work out there. Companies hang on to their workers as long as there’s hope the market will turn. When that doesn’t happen, they have to lay people off and cut jobs they otherwise would have kept. We have also seen mergers among companies, and situations where two jobs are consolidated into one.”
He expects more furloughs, layoffs and jobs cuts, “The trend shows this hasn’t topped out yet,” Erichsrud told DN. Asked when the cutbacks would stop, he answered “The day the oil price, costs and budgets and back in balance again.”