OSLO, Norway, July 7 (UPI) — Strike action that would have impacted production offshore Norway has been averted after a deal was reached on pay rates, a labor union said Thursday.
Mediators negotiating on behalf of offshore energy workers warned last week that about 6 percent of the daily oil and gas production from Norway, one of the lead suppliers to the European economy, may be idled if talks collapsed.
Jan Hodneland, the chief negotiator for the Norwegian Oil and Gas union, said industry leaders made a breakthrough in their discussions late Wednesday, averting a strike.
“The mediation process was demanding, but we reached a conclusion in line with the framework for the lead sector’s settlement,” he said in his statement Thursday.
Union leaders negotiated an annual pay raise, as well as adjustments for shift and night work. Both sides also agreed to work jointly to find ways to drive down costs on the Norwegian continental shelf.
Last week, Hodneland said union and industry leaders were negotiating with efficiency in mind. With crude oil prices holding at about 50 percent below 2014 levels, he said the goal was to improve competition in a way that preserved “as many jobs as possible.”
Statistics Norway, the government’s record-keeping administration, said demand pressures on the petroleum industry started to wane at the end of 2013, which triggered the downturn in crude oil prices.
As an exporter, the lower price for crude oil is taking a toll on the nation’s economy. Mainland gross domestic product for Norway increased by about 1 percent last year and the government said lower growth is expected this year.
The Norwegian Petroleum Directorate, the nation’s energy regulator, said preliminary data indicate oil production averaged 1.55 million barrels per day. That’s a decline of more than 5 percent from April, but 2 percent higher than May 2015.
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