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Fri, 6th Jul 2012 09:01

By Nerijus Adomaitis

OSLO, July 6 (Reuters) - The Norwegian government could wade into a dispute between offshore oil workers and employers over pensions as early as Friday, analysts said, to force an end to a strike which has cut crude and gas output and kept oil markets on edge.

Such a move would avert a total shutdown of production on the Norwegian continental shelf after the oil industry upped the ante on Thursday with a lockout of offshore workers, easing nerves over production in the world's eighth-biggest crude exporter.

Analysts said the clock was ticking for the Norwegian government to stop Tuesday's planned lockout and end the strike. It is also under pressure to reassure oil markets and protect Norway's image as a reliable energy exporter.

Thina Saltvedt, an oil analyst at Nordea, saw a government move in the coming days, possibly on Friday.

'It will be very likely, because of the consequences. I would not be surprised to see that today, and then, of course, this strike will be cut and we will have oil production coming back up quite quickly.

'I think it will be very likely that something happens today,' she added.

SEB Enskilda wrote in a note that the situation would likely get resolved before midnight on Monday.

'We thus believe that the announced lockout and full halt in production from the Norwegian continental shelf will not happen,' the bank said.

Still, Norway's oil strike has kept Brent crude oil futures on the boil, causing prices to spike above $102 a barrel Thursday when the lockout was called. Prices cooled to just below $100 on Friday on worries over weak global growth.

'Brent is supported by the escalation of the labour dispute in Norway, but the focus remains on demand,' said Victor Shum, a senior partner at oil consultancy Purvin & Gertz.



PRECEDENT

Markets are holding out the hope that the Norwegian government will step in to prevent any major supply disruptions as it did in 2004, just one day after the oil industry called a lockout.

It has the authority to force an end to a strike if it believes safety is being compromised or vital national interests could be harmed.

The government is monitoring developments. 'The situation is the same and we are doing nothing as of now. We are following the situation,' a spokesman at the labour ministry said.

The strike, now in its 13th day, has already cut Norway's oil production by around 13 percent and gas output by 4 percent.

At the core of the dispute is an early retirement age of 62 for the sector's 7,000 workers due to harsh work conditions, a perk which top executives at Statoil already have.

The oil industry association (OLF) argues that salaries are already high - some of the highest in the world - and that union demands are not in line with government pension reforms.



(Additional reporting by Vegard Botterli; writing by Mia Shanley; editing by James Jukwey) Keywords: NORWAY LOCKOUT/

(mia.shanley@thomsonreuters.com)(+4687001004)(Reuters Messaging: mia.shanley.thomsonreuters.com@reuters.net)

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