As if an oversupplied market, waning demand, cancelled contracts and falling dayrates weren’t already enough to deal with, offshore drillers on the Norwegian Continental Shelf (NCS) now face a potentially massive strike… again.
After yet another disagreement over NCS pay, some 1,346 workers have been directed to strike beginning June 5 if a pay increase deal is not reached. The action would hit 17 offshore facilities (mostly drilling rigs, but also accommodation units and production facilities) and 22 companies. Some of the established companies impacted include Rowan, NADL, Ocean Rig, Songa, and Transocean. A full list of the impacted rigs and companies can be found at the end of this post.
The collective dismissal of the 1,346 workers for June 5 was signed by Industri Energi, the Norwegian oil and gas labor union. The union represents some 5,500 Norwegian workers employed on rigs.
The disagreement is over wage increases, which have been put on hold by the Norwegian industry organization because of the downturn. The union is describing the industry’s stance as a “confrontation line” and ordered the strike as negotiations over the anticipated wage increase stalled.
Over 100 workers are scheduled to walk off the Leiv Eiriksson on June 5
The industry representatives argue that the concern should be securing jobs, citing the fact that some 2,500 workers have been either laid-off or have faced labor adjustments. In this uncertain rig demand environment, industry representatives argue wage increases are unreasonable, and say wage levels will depend on companies’ ability to pay.
Exactly one year ago, a strike threat was averted as the two sides reached a deal in wage talks after negotiations also broke down. Three years ago, roughly 10% of Norway’s offshore workers went on strike for 16 days, shutting in 13% of the country’s oil production and 4% of gas production. A government intervention ended that strike, after the oil firms threatened a full lockout. That strike helped push oil past the $100 mark.
The Best Paid Offshore Workforce Wants More, Even As Offshore Drillers Struggle To Stay Afloat
The dispute appears destined for a state mediation hearing, but the office mediator has not yet set a date for mediation. At this point, discussing the potential outcomes or timing is nothing more than speculation.
While offshore conditions on the NCS are admittedly some of the harshest in the world, Norwegian offshore workers are the best compensated in the world. And they have the best benefits/work schedule of any offshore market as well – two weeks on, four weeks off in many cases. The industry has historically caved to the demands of organized labor in Norway, but the offshore drilling business hasn’t been as weak as it is now in over a decade.
So while a strike of this magnitude demands action, an extended standoff is not out of the question.
The Nitty Gritty – Here’s The Details Of The Strike
In the table below is a list of how the 1,346 potentially striking workers are spread across the offshore facilities and the names of the companies impacted. You’ll notice how many of these rigs have both the operational crew and the catering crew striking. You can see the catering crews striking by looking for companies like Sodexo, 4Service, and Norwegian Offshore Catering AS in the list below.
“We have carried out a balanced effort where everyone will be impacted to some degree,” said union leader Leif Sande in a statement on Friday.
The catering crew strikes could be a pretty devastating blow – without food, offshore rigs are inhabitable. So even if not all the critical operations folks are striking, the catering exit would hamstring these offshore assets.
|Facility Name||Type||Company||Number Striking Workers|
|Heimdal||Riser Platform||Archer AS||34|
|COSLPromoter||Midwater Semi||COSL Drilling Europe AS||63|
|COSLPromoter||Midwater Semi||ESS Mobile Offshore Units||15|
|Borgland Dolphin||Midwater Semi||Dolphin Drilling AS||35|
|Wellserver||Intervention||Island Offshore Crewing||19|
|Jorunn Knutsen Asqard C||FPSO||Knutsen Offshore||24|
|Maersk Giant||350 ft. IC Jackup||Maersk Drilling Norway AS||111|
|Maersk Giant||350 ft. IC Jackup||Norwegian Offshore Catering AS||22|
|West Epsilon||350 ft. IC Jackup||North Atlantic Crew||85|
|West Epsilon||350 ft. IC Jackup||Sodexo Mobile Units||13|
|Leiv Eiriksson||UDW Semi||Ocean Rig North Sea AS||89|
|Leiv Eiriksson||UDW Semi||4Service||22|
|Deep Sea Atlantic||UDW Semi||Odfjell Drilling||58|
|Deep Sea Atlantic||UDW Semi||4Service||20|
|Rowan Viking||400 ft. IC Jackup||Rowan Norway||111|
|Rowan Viking||400 ft. IC Jackup||Sodexo Mobile Units||22|
|Songa Delta||MW Semi||Songa Offshore Services AS||103|
|Songa Delta||MW Semi||Norwegian Offshore Catering AS||22|
|Scarabeo 8||UDW Semi||Saipem SPA||204|
|Scarabeo 8||UDW Semi||Norwegian Offshore Catering AS||17|
|Stena Don||MW Semi||stena Drilling||84|
|Stena Don||MW Semi||Trinity Nordic||20|
|Transocean Arctic||MW Semi||Transocean Offshore||40|
|Transocean Arctic||MW Semi||Sodexo Mobile Units||23|
sources: offshore.no, oilpro, company data