Norwegian Strikes Hits Statoil Gas & LNG Exports

A strike at one of Statoil's largest Norwegian gas fields will have a knock-on effect for methanol and LNG from its Tjeldbergodden plant, the company has said.

Striking workers, who are protesting a decision to cut an add-on to a retirement package, have so far caused the Heidrun gas field and the Oseburg oil field to be shut down. Lack of gas from the Heidrun field will also cause the Tjeldbergodden facility to have to be shut. That facility will shut either today or tomorrow.

"Given the extent of the strike on the Oseberg Field Centre and the Heidrun platform, it will neither be practical nor justifiable from a safety perspective to maintain production," executive VP for Statoil, Oystein Michelsen, said in a statement to the Dow Jones news agency yesterday.

The fields are now in the process of winding down, an activity which is expected to take between four and five days.

In a statement yesterday, the Norwegian Oil Industry Association (OLF) said the strike action was already costing massive amounts in revenue.

"The unions are imposing substantial costs on the companies and Norwegian society," chief negotiator for the OLF, Jan Hodneland said. "The strike will cost roughly NOK 150 million (approx. €20 million) per day, so it will not take long before the bill tops NOK 1 billion (approx. €133.4 million)."

Statoil's own estimate of the cost per day to its operations, which it told the Dow Jones news agency yesterday, is NOK 115 million (approximately €15.34 million) a day.

The OLF also warned that the Skarv gas field, which is currently offline, may also be affected once it comes back online for production. The BP-operated field is due to begin production in autumn.