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Norway's oil companies managed to strike a deal with oil workers' unions in principle, avoiding, for the time being, the risk of a strike that would have affected production at nine fields in the country.
"Agreement. No strike. But Lederne and Safe (trade unions) send the results to a referendum (of) their members," said a spokesman for an industry lobby group told Reuters. "They will have to answer (by) June 30."
The trade unions want a pay increase above inflation levels, among other demands.
Strikes at Norwegian oil fields have been a more or less regular occurrence during annual negotiations of salaries between employers and trade unions. Previous talks have indeed sometimes ended with strikes that have affected Norway's oil production temporarily.
This would have been a bad moment for further supply disruption amid Libya's latest field shutdowns that have reduced its oil output to a tenth of what it was producing at the beginning of the year.
Norway produces some 2 million barrels of oil and other hydrocarbon liquids daily. A disruption in its output would have pushed oil prices even higher. If the trade unions had failed to agree on the new contract terms for their members, at least 647 oil workers would have gone on strike starting last Sunday, out of a total workforce of 7,500 on the offshore platforms where Norway extracts its oil.
Since the agreement with the employers is one in principle only, the risk of a strike remains. Whether or not there will be a strike and a supply disruption now depends on how the trade unions' members vote in the upcoming referendums.
The third trade union that took part in the negotiations, Industri Energi, has been happy with the terms negotiated and will not seek approval of the agreement with employers from its members, Reuters has reported. Industri Energi is the largest oil industry trade union.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com