OSLO (AFP) - The Norwegian government announced it would impose mediation to end an oil-sector dispute that threatened crude production next month, pushing shipowners to drop a threatened lock-out.
"I informed our partners the government would propose to parliament an enforced mediation to end a conflict that appeared blocked and which has lasted almost four months," said Norwegian Labour and Social Affairs Minister Dagfinn Hoeybraaten.
He spoke following a meeting with business and labor representatives from the country's key petroleum sector.
Earlier Monday, the Norwegian Shipowners' Association, which includes groups that serve the oil industry, had threatened a lock-out on November 8 that would totally paralyse production in the world's third-largest oil exporter, after Saudi Arabia and Russia.
NSA lifted its lock-out threat late Monday after the government's intervention.
"The government has appealed to the Norwegian Shipowners' Association to recall notices of lockout, and the association has complied," NSA managing director Marianne Lie said.
Hoeybraaten said his government's decision to impose mediation, which was taken more quickly than in past cases, stemmed from "the movement's dramatic consequences not only for Norway but beyond."
The prospect of a suspension of Norwegian crude exports had roiled oil markets Monday.
The price of Brent North Sea crude oil for delivery in November reached a record peak of 51.90 dollars a barrel in London before settling back to 50.76 dollars following the government's announcement.
In New York, prices hit a record 55.67 dollars a barrel in electronic trades but later dipped to 54.94 dollars.
The government's decision for forced mediation will be considered by the cabinet on Friday then sent to parliament.
However, a vote of approval by the deputies, probably next week, was seen almost certain, bringing striking employees back to work.
Enforced mediation is authorized in Norway when the "life" and "health" of those involved is at stake, but the government has extended that to include national interests during oil conflicts in the past.
Hydrocarbons account for around 20 percent of Norway's gross domestic product, and 44 percent of its exports.
With the lock-out, the NSA aimed for a quick end to its dispute with the Oljearbeidernes Fellessammenslutning labor union.
OFS is demanding that conditions enjoyed by its members when they work offshore also apply 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.
Strikers were now likely to resume work once the parliament approved mediation, which was expected to take place next week.
"I expect this affair will be taken up by the parliament rather quickly," Hoeybraaten told reporters.
"Norway's reputation as a major energy supplier" was at stake, he added.
Oil analyst Anne Gjoen at Alfred Berg ABN Amro in Oslo had earlier forecast an intervention.
"The Norwegian government has a history of using its tool of enforced mediation when labour disputes threaten to close down production on the Norwegian continental shelf," she said.
The speed with which the government intervened surprised some observers, however.
Lock-outs are relatively common in northern Europe, used by employers in the event of a strike. By closing the workplace to non-strikers, employers step up the conflict a notch to break the action or, ultimately, force authorities to intervene.
While intervention is effective in getting workers back on the job, authorities nonetheless do not like to use it because they open themselves to criticism from the International Labour Organisation.
According to the ILO, the practice deprives offshore workers of the right to strike.
10/25/2004 - 18:41 GMT - AFP