OSLO (AFP) - Norway's oil production faces a total shutdown in mid-November after oil sector shipowners threatened to stage a lock-out to end a strike that has weighed on the industry since July.
"The impact of this secondary lockout, which comes into force from midnight (2200 GMT) Monday, November 8, 2004, will then have immediate effect, and bring the production of oil and gas on the Norwegian shelf to a standstill within a week," the Norwegian shipowners association (NSA) said in a statement.
An interruption of oil production could send oil prices, already at all-time highs, soaring even further. Crude oil on Monday hit a record 55.60 dollars in Singapore, while in London the price of Brent North Sea crude oil rose to a record 51.90 dollars a barrel in pre-opening electronic deals.
In the past, the government of Norway, the world's third largest oil exporter behind Saudi Arabia and Russia, has intervened in all social actions that threatened to seriously impede hydrocarbon production.
The conflict comes amid market concerns that producers will not be able to meet growing demand for black gold as winter approaches and amidst geopolitical tensions around the globe and the recent hurricanes in the oil-rich Gulf of Mexico.
NSA, the shipowners association that includes companies that serve the oil industry, said its "sympathy lock-out" would suspend activities on 94 of its ships.
With the lock-out, the association is hoping for a quick end to its conflict with the Oljearbeidernes Fellessammenslutning labor union.
OFS is demanding that the conditions enjoyed by its members when they are working offshore apply as well when ships are travelling to a site or are under repair.
The OFS strike, which began on July 2, targets the exploration sector but has incidentally affected two mobile production units.
Production losses already amount to 55,000 barrels a day, or two percent of Norway's average daily production of around three million barrels.
Barring government intervention, the lock-out will affect more than 18,000 employees directly or indirectly.
"A small group, representing less than 20 percent of all employees, have put the entire industry under pressure to force through demands they know very well NSA would not be able to meet without imposing an enormous strain on company competitiveness," NSA managing director Marianne Lie said in a statement.
"A secondary lockout is the only means we have left to persuade OFS to accept an offer that 80 percent of the industrys workers have already accepted," she said.
The striking union said meanwhile that it viewed the lock-out threat as a "cry for help" from the NSA to the government.
"We are going to continue the strike," the deputy head of OFS, Bjoern Tjessem, told AFP. But, he added, "the risk that the government may intervene is quite big."
The government meanwhile issued a final call for the two sides to resolve the conflict on their own.
"The two sides are responsible for this longlasting and deadlocked conflict, and its consequences," Labour and Social Affairs Minister Dagfinn Hoeybraaten said in a statement.
He said the government was looking "very closely" at the potential consequences of a lock-out.
Should the two sides fail to reach an agreement, Norwegian authorities could impose forced mediation citing national interests, as they did on June 25 when another conflict also threatened to bring oil production to a halt nationwide.
Oil revenues account for about 20 percent of the Scandinavian country's gross domestic product and 44 percent of its exports.
10/25/2004 - 10:14 GMT - AFP