Page 12 - EurOil Week 25 2022

EurOil POLICY EurOil

Oil strike off Norway looks set to be averted

NORWAY AN oil strike off Norway looks set to be avoided would personally recommend the agreement
after a union head said on June 20 that a wage as it was “good enough.” Both unions have until
Union chiefs indicate deal offered by employers “had a lot of food June 30 to issue a formal recommendation to
they are happy with the things,” and that he had not received any negative members on how to vote.
settlement.. feedback from members. The third union involved in the dispute,
Two of the three unions party to the agree- Industri Energi, accepted the wage deal without
ment reached earlier this month are seeking seeking membership approval.
approval from their members before they for- The strike was proposed to take place at
mally endorse it. If this does not happen, the nine Norwegian fields, including some 7,500
strike they have proposed would impact Nor- employees. Had it gone ahead, it would only
wegian petroleum output. have impacted 2% of daily Norwegian pro-
Auden Ingvartsen, who heads the Lederne duction, and the unions had said they would
union, told Reuters he personally thought the avoid major disruptions to gas supply, given
offer that gave affected members a pay rise of how tight Europe’s gas market currently is, and
4.0-4.5% with extra benefits had “a lot of good considering the EU’s phase to phase out Rus-
things.” sian imports.
“Hopefully, our members will say yes, and Around half of Norway’s workforce belong
there will be no strike. I haven’t heard much of a to a trade union, giving them a strong hand in
negative reaction,” he said. “If it’s a big ‘No’, then negotiations. Pay settlements in the country’s
we will, of course, have to listen to our members.” oil and gas sector are subject to negotiations
The leader of one of the other unions, Safe, each year, and often lead to threats of industrial
had told the news agency on June 17 that she action. ™

UK windfall tax already showing pain: OEUK

UK THE UK’s windfall tax on the North Sea oil projects already underway – but is likely to deter
industry is already showing signs of a negative investments under consideration, for which
OEUK warns impact on investment, sector lobby Offshore funds have yet to be confirmed. The UK’s off-
that without new Energies UK warned on June 19. shore sector includes many independent com-
investment, the country The statement comes after the Sunday Tel- panies who spend years planning investments
will source 80% of its egraph newspaper reported that Norway’s that can be very risky.”
gas from overseas by Equinor was considering abandoning a $5.5bn OEUK has been clear it expects the tax to
2030. plan to develop the Rosebank field near the Shet- result in production decline, while also under-
land Islands in light of the new tax. The paper mining the energy transition by stripping oper-
also reported that Shell had separately told ana- ators of the capital they need to reduce their
lysts it was now less likely to go ahead with the emissions and invest in low-carbon technologies
$2.5bn Cambo project to exploit one of the UK’s such as wind, solar, hydrogen and carbon cap-
largest undeveloped oilfield, because of the levy. ture and storage (CCS).
The UK government in late May imposed Five former UK and Scottish government
a 25% profit levy on oil and gas companies to ministers publicly called for more support for
raise funding to subsidise soaring energy costs the industry in a pledge on June 13, urging an
for households and businesses, adding to the end to the “polarised” view that such support
40% tax rate they already pay. The tax includes was incompatible with backing for renewables.
an investment allowance that enables operators Shell announced in early December last year
to obtain a GBP0.91 tax saving for every pound it was leaving the Siccar Point-operated Cambo
they invest, according to the government, but it project because its economic case “was not
has nevertheless been roundly criticised by the strong enough” and there was a risk of delays.
industry. Cambo was also the subject of a sustained
OEUK estimates that without new invest- campaign by environmentalists, and Shell’s
ment, by the end of the decade the UK will announcement came shortly after Scottish First
source around 80% of its gas and over 70% of its Minister Nicola Sturgeon voiced her opposition
oil from abroad. to the project.
“This is an industry that thinks and plans However, the BBC cited sources in late March
long-term, so sudden new taxes will always dis- as saying that Shell, which has not yet sold its
rupt investment plans,” OEUK CEO Deirdre interest, was reconsidering its position in light
Michie said. “The windfall tax may not affect of soaring oil and gas prices. ™

P12 www. NEWSBASE .com Week 25 23•June•2022