Two labor unions and the Norwegian oil industry sealed a new wage deal that would ensure no strikes take place, affecting oil and gas output this year.
The talks are a regular occurrence in Norway and sometimes end with strikes if the companies refuse to give the unions what they want, which is usually higher wages for oil workers. Five years ago, the failure of the talks resulted in a strike that led to a 300,000-bpd drop in Norway’s oil production before the two sides finally reached a deal.
Three years ago a strike began again after the unions failed to convince employers to raise wages. Eventually, the Norwegian government had to intervene in order to make sure oil and gas production did not suffer at a time when Europe needed the energy security.
This year, there were no such problems and the oil and gas companies quickly agreed to raise wages by the equivalent of some $3,300 annually. The talks cover around 7,400 oil workers for companies including Equinor, Aker BP, and ConocoPhillips.
Norway is currently Europe’s largest single supplier of natural gas and also the largest producer of oil in the West. The country, which also sports some of the highest low-carbon generation capacity thanks to its abundant water resources, plans to maintain this status by investing more in both oil and gas despite net-zero plans.
This year, investment in oil and gas is seen at $22.9 billion, which would be a record high. The previous record fell in 2014, with $20.4 billion invested in hydrocarbons production—and that was when oil prices were much higher than they are now.
Earlier this year, the government awarded stakes in as many as 53 oil and gas licenses in its latest annual licensing round despite increasingly loud opposition from various environmentalist groups.
“If we are to uphold a stable production in the years to come, we must explore more and invest more,” Energy Minister Terje Aslund said in January when the new licenses were awarded. Norway has been fighting natural depletion and fewer new discoveries—alongside climate groups.
By Charles Kennedy for Oilprice.com
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