Posted on 31.07.2004 - 03:30 EDT in GENERAL NEWS by ginamc
The Norwegian government has intervened in an industrial dispute that had threatened to halt oil production.
The risk that a week long strike would escalate with a lock-out on Monday spurred the government to act.
"Such an escalation of the labour conflict would...have serious socio-economic consequences," said Social and Labour Minister Dagfinn Hoybraaten
"We will be at full production in a few days," said the oil industry association's leader, Per Terje Vold.
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"Production will increase at the fields and installations where production has been decreased."
The threat to close down 4-5% of the world's oil production had been serious, yet oil prices remained steady throughout the conflict as traders had expected the intervention.
Forced to act
The government had been very aware that failure to act would have caused a large chunk of supplies to be cut off from the world's oil market, oil prices would have spiked and Norway's reputation as a responsible player would have been damaged.
But it was also deeply unhappy about the way the oil industry employers forced its hand.
The government has ordered the threat of a lock-out to be cancelled and told strikers to return to work. The orders are legally binding.
"We have to go back to work. We have no other choice. We don't want to do anything illegal now," said trade union official Bjoern Tjessem
A government representative will then function as mediator when employers and unions meet for forced arbitration to decide on terms of employment.
The unions had called the strike, which lasted for eight days, to press for better pension rights and greater job security.
The oil industry is vital to Norway, accounting for almost half its exports and about a fifth of its economic output.
Norway is the third largest oil exporter after Saudi Arabia and Russia and is set to become the second largest gas exporter after Russia.
Source: BBC News