Oil lockout looms large as strike talks fail

A costly shutdown in oil output in Norway, Western Europe's top producer, looks set to go ahead next week after talks between striking workers and employers failed, the employers' group OLF said on Sunday.

"After thirteen hours of mediation with the ombudsman, he did not find a basis to present a written proposal he thought the parties could accept," said OLF in a statement.

"The strike is now on day 15, and the costs are 2.9 billion kroner ($474 billion)."

Norwegian Employment Minister Hanne Bjurstrøm called for a second round of negotiations to take place, OLF said.

The lockout was announced by the energy industry Friday in response to a strike by more than 700 North Sea oil workers over pensions.

According to OLF, the strike, which started on June 24th, has led to losses worth tens of millions of euros a day.

State-owned energy company Statoil had said the lockout would start on Monday at 2200 GMT and "will halt all production" on Norway's continental shelf, where about 50 companies operate, including BP and Royal Dutch Shell.

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

Statoil said it expected a shortfall in production of around 1.2 million barrels of oil equivalent per day, costing 520 million kroner (€69.3 million) per day.

The dispute centres on employers cutting a pension add-on introduced in 1998 for workers 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 unions have branded the lockout "cowardly" and insisted their demands are legitimate but their employers say pensions are more than fair.

"Oil company employees have an average annual income of one million kroner and a retirement age of 65," said Jan Hodneland, OLF's chief negotiator.

"This already makes them Norway's pension winners. They've nevertheless opted to use their power to win even better terms."

Norway is the world's eighth largest oil exporter and second largest gas exporter. In 2004, the last strike of oil workers in Norway lasted one week.

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