Equinor logo is seen displayed in this illustration taken, May 3, 2022.
Equinor logo is seen displayed in this illustration taken, May 3, 2022. Reuters / DADO RUVIC

Norwegian offshore workers began a strike on Tuesday that will reduce oil and gas output, the union leading the industrial action told Reuters.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of natural gas to Europe especially tight after Russian export cutbacks.

"The strike has begun," Audun Ingvartsen, the leader of the Lederne trade union said in an interview.

Operator Equinor has initiated a shutdown of three fields in the North Sea as a result of a strike, the company said on Tuesday.

The Norwegian Labour Ministry reiterated that it was following the conflict "closely". It can intervene to stop a strike if there are exceptional circumstances.

On Tuesday, oil and gas output will be reduced by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Equinor reiterated on Tuesday.

On Wednesday, the strike will deepen the cut to the country's gas output to a total of 292,000 barrels of oil equivalent per day, or 13% of output, NOG said on Sunday, in line with Equinor's estimate.

Oil output from Wednesday will be cut by 130,000 barrels per day, Equinor said, in line with the lobby's earlier estimate.

That corresponds to around 6.5% of Norway's production, according to a Reuters calculation.

A further planned escalation by Saturday could see close to a quarter of Norway's gas output shut, as well as around 15% of its oil production, according to a Reuters calculation.

"Consequences of this escalation are not yet clear," Equinor said.

It is ultimately the operator's - Equinor's - decision to shut output.

THREE-STEP ESCALATION

Industrial action began at midnight local time (2200 GMT) at three fields - Gudrun, Oseberg South and Oseberg East - and will expand to three other fields - Kristin, Heidrun and Aasta Hansteen - from midnight on Wednesday.

A seventh field, Tyrihans, will also have to shut on Wednesday because its output is processed from Kristin.

By July 9, Sleipner, Gullfaks A and Gullfaks C would likely stop producing as Lederne members are considered crucial to operations, with potential ripple effects on other fields which pump their product via those fields.

If they did, it could reduce the output of crude and other oil liquids by another 160,000 boepd and natural gas output by close to 230,000 boepd, according to a Reuters calculation.

Members of the Lederne trade union on Thursday voted down a proposed wage agreement that had been negotiated by companies and union leaders.

Norway's other oil and gas labour unions have accepted the wage deal and will not go on strike.

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