Norway Strike Could Knock Out A Quarter Of Oil, Gas Output Next Week

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October 8, 2020

OSLO: A strike by Norwegian oil workers could knock out almost a quarter of the country’s petroleum production by Oct. 14, operators say, raising the prospect of further price rises on the international oil market.

The price of North Sea oil rose by around 1.1% to$42.46 a barrel by 0755 GMT on Thursday, Refinitiv data showed.

The dispute began on Sept. 30 when wage talks between the Lederne union and the organisation representing oil companies collapsed, but the first production outages only started on Oct. 5.

The union wants to match the pay and conditions of workers at onshore remote control rooms with those of offshore workers, as well as have a higher increase in this year’s wage round than proposed by oil firms.

Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said.

U.S. oil major ConocoPhillips announced on Thursday the planned shutdown on Oct. 10 of its Ekofisk 2/4 B platform, with output of 7,000 boepd, one of eight offshore facilities at the giant field.

Another six oil and gas field could fully or partly close by Oct. 14, including the Ekofisk platform, the industry has said.

A water injection platform, which helps uphold well pressure at the Ekofisk field, is also set to close, the company added.

“ConocoPhillips will take necessary measures to ensure safe operations on the Ekofisk field during the strike,” it said.

The biggest outage would be at Equinor’s Johan Sverdrup oilfield, the North Sea’s largest with an output capacity of up to 470,000 barrels of oil per day, Equinor said on Wednesday.

In total 941,000 boepd are expected to go offline so far.

Of the fields that have closed, close to 60% of the total cuts were natural gas, with crude oil and natural gas liquids making up the rest, a Reuters calculation based on official Norwegian output data showed.

But the shutdown of Sverdrup, which began production a year ago, would heavily tilt the balance of cuts towards crude oil.

The strike is cutting Norwegian gas exports by 35 million cubic metres per day, Refinitiv analysts said in a note.

“The addition of four more fields (Oseberg South, Osberg East, Ekofisk and Kristin) to industrial action could increase that impact to around 42mcm/d when looking at the recent output of said fields.”

If Sverdrup were to shut down, the impact on gas output would be “minimal”, Refinitiv said.

(Additional reporting by Nora Buli, writing by Terje Solsvik; editing by Gwladys Fouche and Barbara Lewis)

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Norway Strike Could Knock Out A Quarter Of Oil, Gas Output Next Week

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