|Lockout Threatens Norwegian Oil Production After Pension Talks Fail|
|Written by Michelle Reeves, Four Green Steps|
|Friday, 20 July 2012 00:12|
Written by Michelle Reeves, Four Green Steps
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Because of a dispute over pensions between the Norwegian government and oil companies, employees will be locked out as of midnight in the night between Monday, July 9th and Tuesday, July 10th.
Employees of Norway’s three main unions have been on strike for 15 days now. They are fighting for offshore workers’ demand to retire early, at the age of 62, with a full pension. But after negotiations fell through for a third time, energy companies are locking out their employees and hoping to force the government to use emergency powers to end the strike.
As a result, the price of oil has been steadily rising. In London, Brent crude reached above 99$ a barrel after rising more than 1$.
The government’s emergency power gives it the right to end a strike if it is considered that safety is compromised or that national interests are at stake. Norway is the world’s fifth largest oil exporter and has already seen its oil production drop by 13% along with its gas output by 4% since the beginning of the strike on June 24th. The Norwegian oil industry association (OLF) has estimated the damages in 2.9 billion kroner (48 million USD) in lost production.
After 13 hours of negotiations, Jan Hodneland, chief negotiator at the Norwegian Oil Industry Association, said talks had failed once more. The OLF sees no other option that to lock out all 6,515 oil and gas workers who are affected by offshore pay agreements.
"Oil company employees have an average annual income of 1m Norwegian kroner (£105,000) and a retirement age of 65. This already makes them Norway's pension winners. They've nevertheless opted to use their power to win even better terms," said Mr Hodneland, “We’re living longer, so we’ve also got to work longer.”
The lockout is expected to halt all production on Norway’s continental shelf, which affects about 50 companies, including energy giants such as BP and Royal Dutch Shell.
Norway’s official retirement age is 70 and the average oil worker retires at 65. The elimination of the pension for workers retiring at 62 was introduced in 1998 and is at the centre of this fight.
Image courtesy of Creative Commons.
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