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A last minute deal agreed on Monday to hike wages of offshore oil and gas workers in Norway averted a strike that could have severly disrupted the industry, as well causing flight traffic and shutting other key industries.

Mediation talks were held between unions and employers during the weekend, where unions agreed on a 3.4% pay hike, which is below the central bank’s projection for a four percent increase, reported Reuters.

The strike would have interrupted supplies to important offshore oil and gas platforms, disrupted traffic at Oslo’s international airport and closed down key industries in the country.

In addition, the strike could have initially impacted 17,000 people and was expected to have shut two key bases, Mongstad and Vestbase, from which many of Statoil‘s biggest offshore platforms are supplied with food, fuel and drilling fluid.

Welcoming the deal, the head of the LO union, Roar Flaathen, was quoted by Reuters as saying the agreement is a responsible and fair settlement, which has considered jobs and businesses, as well as guaranteed that the purchasing power of the lowest paid gets an extra boost.

Offshore union Industri Energi said that facilities, including Statoil’s Troll B and C, Oseberg, Njord and Aasgard A and Shell‘s Draugen platform, would have also been affected due to the strike, reported upstreamonline.

Operations of companies such as Kleven Verft, Westcon and Bergen Group yards, and contractors Aibel and Apply Leirvik have been spared after the proposed strike was lifted.

Last summer, offshore workers demanded higher wages and shutdown large parts of the oil sector in the country, ultimately forcing the government to mediate.

Norway is the seventh largest oil exporter and second biggest piped gas supplier in the world, and its strike in 2012 pushed global oil prices by nearly $2 (£1.30) per barrel.

Wages are already more than 60% of the European average, while stagnating competitiveness has been an increasing problem, even for the oil sector.


Image: Mongstad industrial base in Norway. Photo courtesy of Nina-no.

Energy