Statoil to halt production amid lockout

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.

Statoil to halt production amid lockout
File image of the Oseberg oil field in the North Sea (Photo: Marit Hommedal/Scanpix)

"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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NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.