1,000 Oil and Gas Workers Locked Out, Threatening Production in Norwegian Waters

Around 1,000 oil service workers in Norway have been barred from working, effective Saturday morning local time, in a lockout that marks the latest escalation of an industrial dispute threatening to disrupt drilling and curtail oil and gas production on the Norwegian continental shelf. The decision, announced by industry group Offshore Norway on Friday, was taken in response to an ongoing strike by hundreds of members of the Safe trade union. The lockout affects employees at major service companies including SLB, Halliburton, Subsea 7, DOF Subsea, Weatherford, DeepOcean, and Baker Hughes. Offshore Norway confirmed that approximately 1,000 Safe members covered by the oil well service agreement were required to stop work from 7 a.m. on Saturday. Of the 1,770 workers covered by the wage agreement, around 500 in safety-critical roles are exempt from the lockout. The preceding strike had already brought drilling and well operations to a complete halt at several locations, including four mobile rigs, five fixed installations, and one intervention vessel. Offshore Norway projects that national oil and gas output could fall by around 12,000 barrels of oil equivalent per day next week, with losses potentially exceeding 120,000 boepd after mid-July if the strike persists. Norway is Europe’s largest pipeline gas supplier and accounts for roughly 2% of global oil production, with total oil and gas output of about 4 million boepd. The Safe union launched the initial strike on 15 June after failing to reach a wage agreement with employers, while a separate union, Styrke, accepted the pay offer. Safe announced on Friday that it plans to withdraw an additional 63 members from the exempted safety-critical pool starting 1 July, adding to the 378 members already on strike. The Norwegian government has the legal authority to intervene and halt strikes or lockouts if vital national economic interests are at stake, but has signalled reluctance to act. Labour Minister Kjersti Stenseng told Reuters on Tuesday that the threshold for intervention is very high and that compulsory wage arbitration is, and must remain, a last resort.