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Strike Hits Nine Rigs in Norwegian North Sea

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The FPSO Petrojarl Knarr, deployed at Shell's Knarr field (file image courtesy Teekay)

By MarEx 2018-07-11 13:07:13

Royal Dutch Shell has been forced to temporarily shut in its Knarr field in the Norwegian North Sea due to a strike. Statoil (now Equinor) has shut down drilling operations at another platform, Snorre B, but it says that production is unaffected so far. 

Knarr has an output of about 24,000 bpd, and the shutdown contributed to a brief hike in the benchmark Brent crude price to $79 per barrel. On Wednesday, competing concerns about the return of Libyan oil exports and the negative impact of the U.S.-China trade war combined to push Brent back down.

The North Sea strike affects nine offshore facilities, including both production and drilling units, and 669 unionized employees are halting work. An additional 901 union members could walk out on Sunday if labor and management do not reach an agreement. 

Norwegian offshore workers' union SAFE said that it could not reach a deal with the Norwegian Shipowners' Association by a strike deadline Monday night. In a statement, SAFE said that 80 percent of its membership had rejected the association's latest offer. 

The dispute centers on pension provisions for new hires, according to the union. Offshore operators suggested that SAFE's negotiating position was out of line with the industry standard for benefits. Jakob Korsgaard, the association's lead negotiator and the chief executive of Maersk Drilling Norge, told NRK that the union's requirements were "irresponsible" and disruptive. "Three other trade unions thanked us for what we consider to be an attractive offer," he said.