Norway’s Knarr field strike forces Shell to pause production

Talal Husseini 10 July 2018 (Last Updated July 10th, 2018 17:07)

Shell has suspended production at Norway’s Knarr oil and gas field due to hundreds of workers going on strike. Credit: Teekay Corporation.

Norway’s Knarr field strike forces Shell to pause production
Shell has suspended production at Norway’s Knarr oil and gas field due to hundreds of workers going on strike. Credit: Teekay Corporation.

Oil giant Shell has been forced to shut down production at its Knarr oil and gas field off the coast of Norway, due to hundreds of workers going on strike.

The workers chose to strike after the employers’ representatives, the Shipowners’ Association, failed to negotiate a new pay deal with trade unions SAFE and YS.

Shell spokesperson Philip Robinson told Offshore Technology: “I can confirm that production from the Knarr field in the Northern Norwegian Sea has been paused due to the oil and gas industrial action in Norway.  Production is expected to resume once the industrial action has concluded.”

From 17 July, 670 workers plan to strike with 901 more employees set to join them at midnight on 22 July if the parties cannot reach a deal, SAFE told the Shipowners’ Association. It said that up to 2,250 workers could join the protest.

Negotiation mediator Carl Petter Martinsen said: “The parties were so far apart from each other there was no point presenting a proposal that could be recommended to both sides.”

Knarr field strike details

SAFE union leader Hilde-Marit Rysst told Offshore Technology: “The Knarr field strike is happening because the employers want to take away a pension guarantee scheme from our members.

“They say that the agreement cannot be for workers who are being hired now. This affects our colleagues who have been working for several years, but because of the difficulties in the industry, they lose their guarantee scheme. It’s a lot of money, and it will make a difference between the colleagues that SAFE cannot accept.

“We also have a claim about wages, because our members have lost pay over several years, and this year, we have to get something back.

“There is a pay gap between the salaries for those working from the platform to the oil rig, which we have to make smaller.”

The trade union said it would initially remove 106 workers from the Teekay Petrojarl production ship operating at the Knarr field, which produces 23,900 barrels of oil a day, in addition to natural gas and natural gas liquids (NGLs).

It noted that 117 workers from the Transocean Spitsbergen rig plan to strike, in addition to 80 from the Songa Offshore Enabler, 71 from Odfjell Drilling’s Deepsea Stavanger, and 60 from North Atlantic Drilling’s West Elara rig.

Around 40 Archer Drilling workers are set to join the protest from the Snorre B rig owned by Equinor, Norway’s largest operator of offshore oil and gas platforms. Equinor said that the strike had not disrupted production until now.

In 2017, Norway pumped 1.97 million barrels of oil and NGL according to BP’s Statistical Review, making it Western Europe’s largest oil producer. The same report found Norway to be the world’s seventh largest producer of natural gas, second in Europe behind Russia, as the Nordic nation produced 123 billion cubic metres last year.

The impending Knarr field strike has led to an increase in Brent crude prices. Brent crude rose this morning by 0.8% to $78.70 per barrel, after a 1.2% increase on Monday.

Earlier this year, Industri Energi, the union that represents the majority of Norwegian oil workers, negotiated a successful wage deal with the Shipowners’ Association.