Norway May Take Action to End 19-Day Oil Strike

In apparent change of policy, the government indicated today that it may take steps to end the 19-day strike that has shut down Norway’s offshore oil and gas production.

After a last mediation effort failed, Labor Minister Arne Rettedal called the parties in Norway’s offshore labor conflict to a meeting, and later told a radio interviewer that he would not rule out the possibility of mandatory arbitration.

The walkout by 675 food caterers employed on fixed production platforms and other offshore installations triggered the conflict April 6. The caterers’ strike was followed by employers’ locking out some 3,500 other platform workers.

900,000 Barrels a Day

The dispute removed about 900,000 barrels a day from the world oil market, which was already glutted with between 2.5 million to 3 million more barrels than it needed.

This helped boost prices, which had dropped by two-thirds from about $31 a 42-gallon barrel in late November, to levels between $11 and $14 in often-volatile trading.

On Thursday, however, after strengthing over the week levels to near $14, prices turned back downward when word of the possible mediation hit the market, analysts said.

During the day, contracts for June delivery of West Texas Intermediate, the benchmark U.S. crude, reached as high as $13.92 on the New York Mercantile Exchange, after opening at $13.40, then plunged back to $13.09 in afternoon trading.

Until Thursday, the government has maintained a hands-off attitude toward the strike, insisting that the two parties resolve their differences without forced government intervention.

But the Norwegian news agency NTB said Rettedal would inform the striking caterers’ union, CAF, and the employers that the government was prepared to use mandatory arbitration to end the strike.

The 155-seat Storting, Norway’s parliament, could pass the necessary legislation on Friday.

Rejects Demands

Employers Thursday rejected CAF demands that would raise the caterers’ wages to no less than 90% of what other oil workers earn.

“If we had accepted the unions’ demand, it would have meant an annual wage increase of more than 30%. The unions originally asked for 28%,” the head of the employers’ negotiating team, Halvor Vaage, told NTB.

NTB said the employers Wednesday night offered the workers an immediate 18% raise and an additional 10% during a new wage agreement period.

Assistant National Conciliator Reidar Webster made what he said would be his last attempt to mediate the deadlocked wage dispute Thursday, then informed Rettedal that his effort had failed.

“Generally seen, this mediation seems extremely difficult,” Webster said on Norwegian radio.