Norway blocks oil, gas strike threatening Europe, strikers to resume work: employers' group

Norway's government has intervened to end a strike by offshore oil and gas field managers, obliging them to resume their posts and lift the threat to European supply, employers' group Norwegian Oil & Gas said July 5.

The government has imposed "compulsory arbitration," with a pay award to be decided by the National Pay Board, Norwegian Oil & Gas, which represents all of Norway's main upstream operators, said.

"Imposition of compulsory arbitration means that the industrial action must be terminated and that the dispute will be settled by the National Pay Board. The strikers have been asked to resume work as soon as possible," Norwegian Oil & Gas said in a statement.

Government intervention can occur on the grounds of a threat to health or safety and in this instance was based on the "gas situation in Europe," a spokesperson for Norwegian Oil & Gas told S&P Global Commodity Insights.

"We're pleased that the government understands the seriousness of the position and is acting to maintain Norway's good reputation as a reliable and stable supplier of natural gas to Europe," said Norwegian Oil & Gas director of organization and employer policy Elisabeth Brattebø.

In response to the announcement, a spokesperson with the Lederne trade union said: "We all accept the compulsory arbitration by the government. We even respect and share their reasons for employing this compulsory arbitration. That does not mean that our claims are not fair, legitimate, and within the rules of the Norwegian system."

"The strike is therefore finished from our side, workers on strike start their work immediately and new strikes are called off. Yet our members have stood together in solidarity on solid democratic grounds."

It was one of three trade unions that reached a preliminary pay agreement during an arbitration process with employers in June, however, its members subsequently rejected the settlement, citing rapidly rising living costs.

Its strike began overnight with the shutdown of two Oseberg oil field facilities and the Gudrun field and was set to be expanded from July 6, with a further escalation on July 9 set to cut Norwegian gas exports by 56% and oil output by 340,000 b/d.

The escalation would have represented a major threat to European security of supply in the context of reduced gas flows from Russia as tensions run high over the war in Ukraine.

Platts' Dated Brent North Sea crude oil benchmark was assessed at $113.15/b July 5, down more than 9%, although still well above the front-month Brent futures price.