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Strike facts

Terms different to those which apply to everyone else in Norway’s oil service sector are being sought by 114 members of the Norwegian Union of Energy Workers (Safe) in Baker Hughes.

The Norwegian Oil Industry Association (OLF) has a pay agreement with the Industry Energy union, which has over 4500 members covered by the oil service agreement. That includes about 600 other Baker Hughes employees.

After fruitless mediation on 8-9 June, 114 Safe members in Baker Hughes downed tools since the OLF could not accept a settlement which gives them other terms than the rest of the industry.

Background
After Baker Hughes and BJ Services merged, the local agreement on pay and conditions in BJ Services was cancelled pursuant to the rules in chapter 16 of Norway's Working Environment Act.

As required by the Act, the company had discussions in October 2011 with the former BJ Services workforce on cancellation of the agreement.

The 114 former BJ Services employees retained the individual employment contracts they held when the business was transferred.

Bound by existing agreements
When the local agreement expired, Safe contacted the OLF in order to negotiate an agreement covering pay and conditions on behalf of its members.

The OLF is bound in such cases by the oil service agreement concluded between it and the Confederation of Norwegian Enterprise (NHO) and Industry Energy/the Norwegian Confederation of Trade Unions (LO).

This states: “As long as this agreement on pay and conditions remains in force between the organisations, none of the parties may conclude new agreements for other companies doing work within the area covered by the agreement containing provisions on pay and conditions which deviate from the provisions in this agreement.”

The current oil service agreement between the OLF/NHO and Industry Energy/LO embraces more than 4 500 employees, including some 600 other employees in Baker Hughes.

The deal offered by the OLF to Safe has corresponded to the terms detailed in the existing pay agreement for the oil service area.

As long as the 114 Safe employees in Baker Hughes are not covered by a pay agreement of their own, the terms in the oil service agreement also apply to them.

Mediation
During the mediation process on 8-9 June with Safe, the first day was devoted to negotiating an agreement on safe and acceptable completion of operations which would be hit by a possible strike.

 On day two, Safe called for the former agreement to be continued. The OLF offered a deal similar to the existing oil service agreement. This was rejected by Safe and the strike began.

 

Impact

The strike could impose extra costs of up to NOK 30 million per day on the companies and society as operations have to be suspended.

Various installations and rigs will be affected because drilling must cease, and the price tag will rise substantially in the longer term. Production is not affected at the moment.

The following installations/rigs will be affected by the strike at Baker Hughes Norge AS

 Rig /Installation    Well              Operator             Consequence
Songa Trym     31/5-O-25 Y1H   Statoil     Operation will cease after well is secured according to procedure, estimated June 18th
Stena Don           31/2-Y24          Statoil                   Might have consequence for upcoming P&A work.
Songa Dee          31/5-K-4           Statoil                   No consequence
Oseberg C           C-25                 Statoil                   Possible well control issue, unless work can continue
Oseberg Øst       30/6-E-14          Statoil                   Operation will cease after well is secured according to procedure, estimated June 25st
Brage                                            Statoil                   No consequence – maintenance stop
Gullfaks C            C-19/C-3          Statoil                   Limited consequences, operation most likely to continue
Transocean Winner 24/6              Marathon            Operation will cease after well is secured according to procedure, estimated June 16th
West Alpha         6506/11             Centrica               Operation will cease after well is secured according to procedure, estimated June 14th
Songa Delta        33/6-3S             Suncor                  Operation will cease after well is secured according to procedure, estimated July 5th
West Navigator                            Shell                      Operation might be hindered after June 18th.
Ringhorn                                      Exxon                    Limited consequences
Scarabeo 8          Odden              Eni/Statoil/Halliburton   Limited consequences

Facts about Norwegian pay agreements

An agreement on pay and conditions in Norway is reached between a union and an employer or employer organisation. Generally speaking, part I comprises a basic agreement, while part II details the specific settlement and special provisions related to the latter.

The agreement must be in writing and contain provisions on expiry and deadlines for cancellation. It must be cancelled in writing. Industrial action is not permitted for the duration of the agreement.

Basic agreement
A basic agreement forms the first section of all Norwegian pay deals established between the organisations (the NHO and the LO/ Confederation of Vocational Unions - YS) covered by the basic agreement.

These basic agreements define the fundamental rules for work. They contain general provisions on negotiations and collaboration between employer and employee, but do not regulate pay.

Normally applying for four years at a time, the basic agreements provide the framework for regulating other settlements.

The OLF/NHO have the following agreements on pay and conditions in the oil and gas industry

 

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