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Labor Dispute Could Cut Oil, Gas Output by up to 120,000 Boe/d, Offshore Norway Says

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A labor dispute is expected to reduce Norway's oil and gas output by 12,000 barrels of oil equivalent per day this week and lead to potential cumulative production losses of up to 10 times that volume, industry body Offshore Norway said Monday.

Offshore Norway, representing the industry in negotiations, said last week about 1,000 SAFE union members covered by a well service agreement would be locked out from Saturday 0700 local time, with impacts on continental shelf drilling and production.

A lockout refers to employers preventing workers from working and cuts their pay, putting pressure on them to agree a resolution.

The lockout, in response to the strike by several hundred members of the Safe union, involves 10 key service providers including SLB (SLB), Halliburton (HAL), Subsea 7, DOF Subsea, Weatherford, DeepOcean, and Baker Hughes (BKR).

Norway Offshore said drilling operations have been significantly impacted, with reduced activity, longer wait times, and planned shutdowns at several sites, according to a statement shared withon Monday.

Drilling and well operations have stopped at four mobile rigs, five fixed installations, one intervention vessel, and four inspection, maintenance, and repair vessels.

"Total production loss is around 12,000 barrels of oil equivalent compared with normal operations. The loss will increase over the coming weeks in July. After week 30, total production loss is therefore expected to reach up to 120,000 barrels of oil equivalent per day," the statement added.

Of the 1,000 of the 1,770 Safe union members covered by the well service agreement to be locked out on Saturday, 500 workers in safety-critical roles would be able to report for duty, according to a Reuters report.

Meanwhile, Safe said it would add 63 more members to the 378 already on strike from July 1, the report said.

Last week, Offshore Norway reached a new labor agreement with trade union Styrke covering about 875 workers at onshore supply bases along Norway's coast.

has also reached out to Safe for a comment.

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