Norway oil firms and labour unions seek mediation to avert strike

OSLO (Reuters) -Wage talks between Norwegian oil firms and three labour unions broke down on Wednesday and will switch to state-led mediation in a bid to prevent strike action by workers, the unions and companies said.

If Norway's government-appointed mediator is unable to broker a deal, union members will be eligible to go on strike, disrupting output from western Europe's largest oil and gas producer.

Mediation in this year's talks is expected to take place in June, the Norwegian Oil and Gas Association has said, although no date has so far been set.

Norway produces around 4 million barrels of oil equivalent per day, almost equally divided between oil and natural gas, and any production cuts could have significant market impact at a time of soaring global energy prices.

The Industri Energi, Safe and Lederne unions had been negotiating since Tuesday with the Norwegian Oil and Gas Association, which represents petroleum companies, in a bid to agree an offshore wage settlement.

The talks cover wages, benefits and working conditions for 7,300 staff employed by oil firms and industry suppliers, including Equinor, Aker BP, ConocoPhillips, TotalEnergies and Vaar Energi.

Wintershall Dea, Repsol, Neptune Energy, OKEA, KCA Deutag Drilling, Sodexo Remote Sites, ESS Support Services, Coor Service Management and 4Service Offshore Hotels were also covered by the talks.

In 2020, the Lederne union, the smallest of the three, called a strike that cut Norway's output by around 330,000 barrels of oil equivalent per day, corresponding to 8% of the country's overall production.

The strike, which lasted 10 days, was split 60% for natural gas and 40% for oil.

During the 2020 strike, a last-minute bargain between Lederne and oil firms prevented an escalation that would otherwise have raised the outage to almost one million barrels of oil equivalent per day.

Separate negotiations covering workers on floating rigs, onshore oil and gas terminals and offshore service companies are scheduled to take place in the coming weeks.

(Reporting by Terje Solsvik, editing by Gwladys Fouche)