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Massive Offshore Drilling Strike Looms As 1,300 Norwegian Workers Prepare To Walk Off 17 Rigs

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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.

Confrontation Line

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.

enter image description hereOver 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
Haven Accommodation OSM Offshore 55
Safe Scandinavia Accommodation Prosafe 30
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
Petrojarl Knarr FPSO Teekay 5
Transocean Arctic MW Semi Transocean Offshore 40
Transocean Arctic MW Semi Sodexo Mobile Units 23

sources: offshore.no, oilpro, company data

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