Norwegian oil lock-out threat seen as preventive measure

OSLO (AFP) - The threat of a lockout in Norway's oil sector issued may never come to pass, analysts said, predicting that the government would step in to prevent a total shutdown of the country's oil production.
"I foresee a rapid end. Either the two sides return to the negotiating table and find an agreement, or the government will impose a solution on them," Arnstein Wigestrand, an analyst at Enskilda Securities, told AFP.
He said the government could choose enforced mediation if the two sides were still unable to reach an agreement before the lock-out called for November 8.
"I think the state prefers to give the two sides a chance rather than having to resort to enforced mediation," he said.
The Norwegian shipowners association NSA, which includes companies that serve the oil industry, threatened on Monday to stage a lock-out in a bid to end a strike that has affected the sector since July.
A lock-out would within a week totally paralyse oil production in Norway, the world's third-largest oil exporter after Saudi Arabia and Russia.
Oil analyst Anne Gjoen at Alfred Berg ABN Amro in Oslo said she expected an intervention.
"The Norwegian government has a history of using its tool of enforced mediation when labour disputes threaten to close down the production on the Norwegian continental shelf," she said.
"I see it as very likely that this will happen now, given the huge economic consequences a lockout will have," she said.
Oivind Munthe-Kaas, analyst at Norwegian Oil Trading, agreed: "The market seems to have already integrated the idea of enforced mediation since oil prices have fallen a bit after opening up."
Lock-outs are relatively common in northern Europe, used by employers as a tool in the event of a strike. By closing the workplace to non-strikers, employers step up the conflict a notch in an effort to break the action or, ultimately, force the authorities to intervene.
In this case, the government is likely to enforce mediation, which is officially authorized when the "life" and "health" of those involved is at stake. The Norwegian government has in the past, during other oil conflicts, extended that to include national interests.
Concretely, the government would have to present a bill after a cabinet meeting, possibly as early as Friday, and parliament would then vote on the issue the following week.
The date of November 8 chosen by the NSA thus gives the government sufficient time to intervene.
"Last time, it didn't take very long before the governement reacted and there could once again be a quick resolution," Oivind Munthe-Kaas, an analyst at Norwegian Oil Trading, told AFP.
On June 25, the government ordered enforced mediation just one day after the threat of a lock-out was issued, that time also threatening the oil production.
On Monday, the government remained vague in its reaction to the NSA's lock-out threat, but gave the two sides a final chance to resolve the issue themselves.
"The two sides are responsible for this long-lasting 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.
While the tool of enforced mediation is effective in getting workers back on the job, the authorities do not like to resort to using it because they invariably open themselves to criticism from the International Labour Organisation.
The ILO says that the practice deprives offshore workers of the right to strike, though nothing prevents dissatisfied unions from launching another strike on another issue at a later date.

10/25/2004 - 14:38 GMT - AFP