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Energy

Equinor maintains oil output, but more workers could strike

OSLO (Reuters) - Equinor EQNR.OL can maintain safe operations at western Europe's largest producing oilfield despite a strike by some workers, it said on Wednesday, but the labour conflict could escalate this week.

FILE PHOTO: A general view of Equinor's Johan Sverdrup oilfield platforms in the North Sea, Norway, December 3, 2019. REUTERS/Ints Kalnins/File Photo

The company has 43 workers on strike at the Johan Sverdrup field after wage talks failed between the Lederne trade union and the Norwegian Oil and Gas Association (NOG).

“Production (at Johan Sverdrup) continues as normal for the present, as the assessment is that the field can be operated safely,” Equinor said in a statement.

“Project activities are reduced due to the strike,” it added without providing further detail.

The field has an output capacity of 470,000 barrels per day (bpd), which is close to a quarter of Norway’s oil output and about 12% of the country’s combined oil and gas production.

A Lederne representative was not immediately available to comment, but earlier in the day the union said operations could yet be halted because the striking workers included key personnel. It also warned of potential strike escalation.

“Sooner or later it (the Sverdrup field) will have to be shut down if the strike continues,” Lederne union chief Audun Ingvartsen told Reuters.

“We will look at what we can do next later today, also at a possible escalation at other platforms, but we hope we could find a solution before that.”

The union was negotiating on behalf of about 1,000 oil workers, according to Norway’s government-appointed wage mediator.

Under Norwegian rules, the union must give a four-day warning before additional workers can join the strike.

Two other unions, Industri Energi and Safe, said they will not strike after reaching a deal with employers.

OUTPUT CAP

Sverdrup’s technical production capacity was increased in April from an original 440,000 bpd.

The government recently said the field’s output should be limited to an average of 415,500 bpd as part of Norway’s agreement with OPEC and other producers to curb output until the end of 2020.

Norway pumps a little more than 4 million barrels of oil equivalent per day, half in the form of crude and other liquids and half from natural gas.

The NOG said Lederne had demanded a larger pay rise for its members than the two other unions.

Lederne has disputed that claim and said that companies had been unwilling to adjust contracts to reflect changes in work practices, adding that this would not cost more.

Editing by Elaine Hardcastle, Jason Neely and David Goodman

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