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Union warns Statoil not to scale back agreements

Tue, 28th Jun 2016 13:55

OSLO, June 28 (Reuters) - Norwegian oil major Statoil must halt attempts to scale back existing labouragreements if it wants to prevent a strike that would hit outputfrom July 2, a trade union said on Tuesday.

About 755 Norwegian workers on seven oil and gas fieldsoperated by Statoil, ExxonMobil and Engie will strike unless a deal on wages and other working conditionsis agreed, three unions announced on Monday.

The fields account for about 18 percent of Norway's combinedoutput of crude oil, natural gas and natural gas liquids (NGL),a Reuters calculation shows.

"I'm certain that employers have understood that we won'taccept a destruction of current agreements," said Joern ErikBoe, spokesman for union Industri Energi, which representstwo-thirds of the workers that would strike.

"The scope of the announced plans will hopefully putsufficient pressure on the largest player, Statoil, withoutexposing us to the risk of government intervention," he said ina statement.

Norway's rules governing labour disputes give the governmentthe power to force an end to strikes under certain conditions,including when national interests are considered to be at stake.

In 2012, the government of the time ended a conflict whenemployers threatened a lockout of workers that would have shutdown all output of oil and gas.

On the seven fields that could be hit initially, overall oiloutput stood at 285,000 barrels per day in the first four monthsof 2016, with natural gas production of 48.5 million cubicmetres (mcm) per day and NGL at 91,600 barrels of oil equivalentper day.

The summer season typically sees a drop in output due toscheduled maintenance and lower demand for gas, however, makingit difficult to calculate the exact impact of a strike.

Engie and ExxonMobil said a conflict would cut output at thefields they operate, while Statoil declined to comment on allaspects of the negotiations, which will be hosted by a statemediator on June 30 and July 1.

Norway currently produces about 1.6 million barrels of crudeand 280 million cubic metres of gas per day. Its combined NGLand condensate output is equivalent to about 400,000 barrels perday.

Employers have argued that a plunge in oil prices since 2014must be accompanied by cost cuts and flexible work practices tohelp keep the industry competitive.

A protracted conflict could ultimately result in more than7,400 workers going on strike, data from the state mediator'soffice show. (Reporting by Terje Solsvik and Henrik Stolen; editing by JasonNeely)

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