Page 10 - EurOil Week 21 2021

EurOil POLICY EurOil

Norwegian oil, gas supply

beats forecasts

NORWAY NORWEGIAN oil and gas supply surpassed Wage talks fail
expectations in April, with gas output supported The risk of industrial action is once again loom-
Supply was encouraged by bullish prices in Europe. ing off Norway, after wage talks involving thou-
by higher gas prices in Liquids production averaged 1.945mn bar- sands of Norwegian oil drilling workers broke
Europe. rels per day (bpd) during the month, beating the down on May 20.
forecast by 3.2%. It was down 4% both month on The negotiations were taking place between
month and year on year, however. Gas extraction the Norwegian Shipowners’ Association (NSA)
meanwhile came in at 11.6% above the forecast. and three labour unions. But the matter will now
It was down 3.3% m/m but up 1.6% y/y. move to arbitration by a state-appointed media-
There has been a rally in European gas prices tor. If progress is still not reached, workers could
in recent months, giving Norwegian operators down tools.
an incentive to delay maintenance runs. Day- The Safe, Industri Energi and DSO unions
ahead prices at the Dutch TTF gas hub spiked at represent workers on mobile offshore units and
$342 per 1,000 cubic metres on May 14, mark- platform drilling permanent installations. They
ing their highest level since September 2018. are employed by Transocean, Saipem, Odfjell
This meant that TTF prices were higher than the Drilling, Maersk Drilling, Archer, Seadrill and
Asian futures-based JKM, instead of trading at a others. While a strike would have limited impact
discount as is normal. on short-term production, it could cause delays
Demand will remain high thanks to the need at expansion projects and fields preparing to
to replenish Europe’s gas storage facilities ahead come on stream.
of the next winter heating season. These facilities The unions requested mediation and by law,
are only a third full, which is close to a five-year their workers can only down tools if that stage
seasonal minimum. also fails. Threats of industrial action are a com-
Carbon prices under the EU’s Emissions mon occurrence in Norway, where unions are
Trading System (ETS) are also high and this has large and influential. Several major oilfields
made coal-fired power generation less compet- supplying 330,000 barrels of oil equivalent per
itive, giving an advantage to gas-burning plants. day (boepd) to the market shut down for several
Carbon prices have risen 72% so far this year, days after a strike by the Lederne offshore work-
reaching $69 per tonne on May 14. ers union. ™

P10 www. NEWSBASE .com Week 21 27•May•2021