Norway oil service lockout takes effect, disrupts offshore drilling

Around 1,000 Norwegian oil service workers were locked out on Saturday morning in an escalation of a labor dispute that is expected to disrupt drilling and some production on the Norwegian continental shelf.

The lockout was declared in response to an ongoing strike by several hundred members of the Safe union and will affect companies including SLB, Halliburton, Subsea 7, DOF Subsea, Weatherford, DeepOcean and Baker Hughes, an industry group Offshore Norway said on Friday.

The country's oil and gas output could fall by about 12,000 barrels of oil equivalent per day (boepd) next week due to the strike and the lockout, industry group Offshore Norway said on Friday.

Offshore Norway said around 1,000 Safe union members covered by the well service agreement would have to stop working due to the lockout from 0700 CET (0500 GMT) on Saturday morning out of some 1,770 members covered by the wage deal. It excludes some 500 with safety-critical roles.

Safe, however, said on Friday it planned to withdraw a further 63 members from the remaining 500 from July 1, in addition to 378 members already on strike.

Four mobile rigs, five fixed installations and one intervention vessel have already completely stopped drilling and well operations due to the strike, the group, which represents employers, Offshore Norway said on Friday.

The impact of the ongoing strike could deepen significantly, with production losses exceeding 120,000 boepd after mid-July if the strike continues, it added.

Norway is Europe's top pipeline gas supplier and produces about 2% of global oil, or about 4 million boepd in total oil and gas.

Safe launched the strike on June 15 after failing to reach a wage agreement, while another union, Styrke, accepted the offer.

The government can intervene to halt a strike and a lockout if it deems it harmful to the country's vital economic interests.

"The threshold for intervention is high. Compulsory wage arbitration is, and should remain, a last resort," the Labor Minister Kjersti Stenseng told Reuters on Tuesday.