Statoil to halt production amid lockout

Statoil to halt production amid lockout
File image of the Oseberg oil field in the North Sea (Photo: Marit Hommedal/Scanpix)
Norwegian state oil group Statoil said on Thursday it was preparing to shut down all production on the Norwegian continental shelf (NSC) after the industry employers' organisation announced a lockout starting next week.

"The announced lockout will take effect on Monday, July 9th, at 24:00 hours (2200 GMT), and will halt all production on the NCS," the company said in a statement.

The lockout will begin just over two weeks into a massive strike by more than 700 North Sea oil workers over pensions which, according to the employers' organisation OLF, has already led to production losses worth tens of millions of euros per day.

Since the strike began on June 24th, the loss amounts to more than 2.0 billion kroner ($333 million), according to OLF's calculations.

"Unfortunately, we see no other course than to notify a lockout," OLF chief negotiator Jan Hodneland said in a statement Thursday.

The lockout will mean that 6,515 workers covered by offshore pay agreements will not be permitted to enter their workplaces as of Tuesday, OLF said.

Statoil meanwhile said it expected the lockout would mean a shortfall in production of around 1.2 million barrels of oil equivalent per day (boe/d).

"The group's lost revenue resulting from the production stoppage will amount to around 520 million kroner ($87 million) per day," it said in its statement.

The company said it was planning a "controlled shutdown of production" on the shelf, which would take between one and four days.

The strike began after talks broke down over employers' refusal to change its decision to cut a pension add-on for employees who retire at 62, three years ahead of the general age for oil workers and five years ahead of Norway's official retirement age, the SAFE and Industri Energi unions said.

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