More than 300 Norwegian oil service workers went on strike on Sept. 21 after wage talks broke down, hitting operations of five large subcontractors to the country's oil and gas industry, the Industri Energi trade union said.
The conflict will force oil firms to halt drilling of some wells on Norway's continental shelf and may later hit output from western Europe's top crude and gas producer, the union and companies said.
State-appointed mediator Mats Wilhelm Ruland said the two sides were nowhere close to an agreement when the negotiations ended almost four hours past the original deadline.
"They were too far apart," Ruland said in a statement.
Negotiating on behalf of 6,500 members at around 30 companies, Industri Energi said it may escalate the conflict in the coming days and weeks unless a deal is found.
A total of 335 workers at Schlumberger Ltd. (NYSE: SLB), Halliburton (NYSE: HAL), Baker Hughes Inc. (NYSE: BHI), Oceaneering International Inc. (NYSE: OII) and Oceaneering Asset Integrity were part of the initial round.
The striking employees work as engineers, operators of ROVs or in the handling of the waste coming out of drilling operations, Industri Energi said.
Oil firms argue that the industry can ill afford to increase costs at a time when crude prices have plunged some 60 percent in the last two years, and said restraint would be required to prevent further job losses during the downturn.
The Norwegian Oil and Gas Association, which negotiated on behalf of oil companies, said the union had made unreasonable demands.
"A conflict won't immediately affect the output of oil and gas from Norway's continental shelf, but may do so if the conflict escalates," it added.
Norway produces about 2 million barrels of oil, condensate and NGL per day, while its output of natural gas currently stands at around 1.8 million barrels of oil equivalents.
State-controlled Statoil ASA (NYSE: STO) is the country's largest oil firm.
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