“Completely unreasonable pension demands by the offshore unions clearly show that they’re placing themselves apart from other workers in Norway,” says Jan Hodneland, chief negotiator for the Norwegian Oil Industry Association (OLF).
His comments follow the decision by Industry Energy, the Norwegian Union of Energy Workers (Safe) and the Norwegian Organisation of Managers and Executives to strike after two days of mediation at the National Mediator in Oslo.
“Oil company employees have an average annual income of NOK 1 million and a retirement age of 65,” notes Mr Hodneland. “This already makes them Norway’s pension winners. They’ve nevertheless opted to use their power to win even better terms.”
It has been clear ever since 1980 that pension issues are excluded from the pay negotiations conducted by the OLF on behalf of offshore employers.
“We’re living longer, so we’ve also got to work longer,” Mr Hodneland emphasises. “The Storting [parliament] approved a pension reform in 2011, but the offshore workforce is now refusing to contribute to the national effort in this area.
“The reform allows everyone to retire at 62 if they wish. If they’re to work until 65, it must pay to do so.”
Everyone covered by the offshore pay agreements was offered a general rise of NOK 25 000 - 30 000 per year. Other pay components were also increased, adding up to an overall increase of about 5 per cent.
The strike so far embraces 708 employees in Statoil ASA, BP Norge AS and ESS Support Services, working on Oseberg (Statoil), Heidrun (Statoil), Skarv (BP, ESS) and Floatel Superior (ESS at Oseberg).
Both Oseberg and Heidrun will have to cease production. It will take about four-five days to shut down these two fields.
The Tjeldbergodden industrial complex in mid-Norway, which gets gas feedstock from Heidrun, will have to shut down after one day.
Skarv is not due on stream before the autumn, but work there will be postponed. That could have an impact on production start-up, reservoir utilisation and other planned operations.
“The unions are imposing substantial costs on the companies and Norwegian society,” observes Mr Hodneland. “The strike will cost roughly NOK 150 million per day, so it will not take long before the bill tops NOK 1 billion.”
A possible stepping-up of strike action or a lockout by the employers can be implemented at four days’ notice.
Background of Strike
The most recent occasions when employees went on strike in connection with negotiating the offshore agreements was in 2000 and 2004.
The agreements in brief
The offshore agreements on pay and conditions cover personnel working on the Norwegian continental shelf (NCS) for oil, catering and drilling companies.
They are negotiated between the OLF, representing the employers, and Industry Energy, the Norwegian Union of Energy Workers (Safe) and the Norwegian Organisation of Managers and Executives on the union side.
The agreements cover roughly 7 100 employees on the fixed installations on the NCS. The great majority are skilled workers with two years of further education college and two to 2.5 years as an apprentice.
The operator agreement is negotiated with Industry Energy, Safe and the Norwegian Organisation of Managers and Executives.
Companies: BP Norge AS, Statoil ASA, A/S Norske Shell, Esso Norge AS, Talisman Energy Norge AS, ConocoPhillips Norge AS, GdF Suez E&P Norge AS and Marathon Oil.
The drilling agreement is negotiated with Industry Energy.
Company: KCA Deutag Drilling Norge AS.
The catering agreement is negotiated with Industry Energy.
Companies: Sodexo Remote Sites Norway, ESS Support Services, Statoil ASA and NOC Services.
Employees by union:
- Industry Energy: 3 580
- Safe: 2 714
- Norwegian Organisation of Managers and Executives: 899