Page 10 - EurOil Week 24 2022

EurOil POLICY EurOil

Norwegian oil strike averted

NORWAY NORWEGIAN oil firms and employees have Valhall, Gudrun, Oseberg East, Oseberg South,
agreed in principle a new wage deal that will Oseberg C, Oseberg B, Ringhorne and Kviteb-
Strike threats are a avert for the time being a strike at nine fields jorn fields.
regular occurence off that could have affected the country’s oil supply, Around half of Norway’s workforce belong
Norway. employers and unions said on June 12. to a trade union, giving them a strong hand in
Two of the three unions that held talks with negotiations. Pay settlements in the country’s
oil firms will seek the consent of their members oil and gas sector are subject to negotiations
before formally approving the deal, according to each year, and often lead to threats of industrial
Reuters. action.
“Agreement. No strike. But [the] Lederne and Had it gone ahead, the strike would only
Safe [trade unions] send the results to a referen- have had an impact on 2% of Norway’s daily
dum [of] their members,” a representative of production, and unions had said they would
the Norwegian oil and gas lobby told the news avoid causing major gas disruptions, given
agency. “They will have to answer [by] June 30.” how tight Europe’s gas market currently is, and
The planned strike would have involved the EU’s push to erase Russian supplies. The
some 845 workers out of about 7,500 employees Gudrun field alone produced 47,500 barrels of
at offshore platforms downing tools on June 12, oil equivalent per day last year, while Oseberg
had negotiations failed. The platforms in ques- East yielded 5,600 boepd and Oseberg South
tion were at the Johan Sverdrup P2, Njord A, 32,000 boepd. ™

Calls growing for a price cap

on Russian oil exports

EU EUROPE has been wrestling to get its members unrealistic goal of completely blocking Russia’s
to sign up to a full ban on Russian oil products as exports, but instead would attempt to lower
Europe is looking at many countries remain extremely dependent on the price of oil to hurt the Russian budget and
ways of reducing how the supply of Russian crude. also siphon off some of the profits Russia would
much money it sends to An oil embargo was supposed to be the earn into a fund, that will therefore encourage
Moscow. flagship penalty in the recently approved sixth the Kremlin to end the war and agree to pay
package of sanctions, but the measures finally reparations.
adopted were watered down and Hungary, Bul- CEO of Ukraine’s national gas company Naf-
garia and Slovakia obtained exemptions. togaz Yuriy Vitrenko called on June 14 for a price
Moreover, even if the EU bans Russian cap on Russia’s exports that would normalise the
imports of oil completely, there is significant market. “Further to the ongoing debate on the
leakage with oil being set to other markets in risks and benefits of different options for the
Africa and Asia that are not participating in the energy sanctions against Russia, I would suggest
sanction’s regime. Currently China and India considering a new, or slightly modified, option of
are receiving half of Russia’s exports in unprece- a “transfer cap”,” he said at a government hearing.
dented volumes, even if Russia’s overall volume “This mechanism would allow transfers in
of exports is down significantly. euros from European off-takers to Russia only
The other problem is that restricting Russia’s within a defined cap. The difference between
exports will drive up demand for non-sanc- the full amount paid by off-takers and money
tioned oil and inflate prices to the point where transferred to Russia will be frozen until Russia
Russia could actually make more money on its withdraws from Ukraine and pays reparations,”
reduced volumes than it did before the war at Vitrenko said.
“normal” prices. Russia is currently earning its “It should be set at a level that covers the
largest currency account surpluses ever despite opportunity costs of the Russian producers, and
sanctions, self-sanctions and a 30% discount on it’s expected to be much lower than the market
its Urals blend of oil. The implementation of a prices [in order] to stop Putin’s war machine.
really strict European oil embargo would almost Russia will have a clear motivation to stop the
certainly send oil prices even higher. war and compensate damages, while market dis-
To get round these problems, there are ruptions will be prevented.”
calls for a new strategy that does not have the “We might see market trends opposite to

P10 www. NEWSBASE .com Week 24 16•June•2022