Norway strike could knock out a quarter of oil, cut gas output

An oil platform in the North Sea, Norway. An industrial dispute about pay and conditions could raise prices further on the international oil market. (Reuters)
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Updated 09 October 2020

Norway strike could knock out a quarter of oil, cut gas output

  • Strike would cut a quarter of Norway’s oil output
  • Sverdrup is Western Europe’s largest oilfield

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 dispute began on Sept. 30 when wage talks between the Lederne union and the organization 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 percent, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said.

US 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 fields could fully or partly close by Oct. 14, including the Ekofisk platform, the industry has said.

A water injection platform, which helps to 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 percent 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 toward crude oil.

The strike is cutting Norwegian gas exports by 35 million cubic meters 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. 


Britain expects ‘very significant’ week for Brexit talks as clock ticks down

Updated 29 November 2020

Britain expects ‘very significant’ week for Brexit talks as clock ticks down

  • Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights
  • Britain’s transitional EU exit agreement expires on Dec. 31, and Britain says it will not seek any extension

LONDON: Britain and the European Union are heading into a “very significant” week, British foreign minister Dominic Raab said on Sunday, as talks over a trade deal enter their final days with serious differences yet to be resolved.
EU negotiator Michel Barnier told reporters in London that “works continue, even on Sunday” on his way to a negotiating session, as both sides look for a deal to prevent disruption to almost $1 trillion of trade at the end of December.
“This is a very significant week, the last real major week, subject to any further postponement... we’re down to really two basic issues,” Raab told the BBC.
Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights.
But Britain’s transitional EU exit agreement — during which the bloc’s rules continue to apply — expires on Dec. 31, and Britain says it will not seek any extension. A deal would have to be ratified by both sides, leaving little time for new delay.
“The bottom line is... in the ordinary course of things we need to get a deal done over the next week or maybe another couple of days beyond that,” Raab told Times Radio in a separate interview.
Earlier, he had signalled some progress on the ‘level playing field’ provisions which look to ensure fair competition between Britain and the EU, and said fishing remained the most difficult issue to solve.
Despite accounting for 0.1% of the British economy, fishing rights have become a totemic issue for both sides. Britain has so far rejected EU proposals and remains adamant that as an independent nation it must have full control of its waters.
“The EU have just got to recognize the point of principle here,” Raab told Times Radio.