), which operates a few oil fields in the Norwegian North Sea,
seems to be braced with trouble. The above-mentioned oil fields are
under risk of being shut down due to strike if management fails to
negotiate with the workers' union regarding pension.
If the strike takes place, it will reduce daily output by 50,000
barrels of crude. According to labor union SAFE, about 190
ExxonMobil workers in Norway would go on strike if necessary, which
would affect production at the Ringhorne, Jotun and Balder fields.
The union wants the company to give better pension terms to 31
workers and grant them a lower retirement age to bring them on par
with other offshore employees.
The parties are likely to meet before a state mediator in late May
or in June. If the meeting is unsuccessful and followed by a
strike, the Norwegian government has the right to enforce a deal
and compel employees to return to work.
Notably, earlier this month, talks between oil firms and two key
labor unions failed. This has raised the possibility of a strike
like that in 2012, thereby making investors concerned. The strike
in 2012 had continued for 16 days across Norway's oil sector and
cut production by 13%, apart from increasing
over $100 a barrel.
However, the latest dispute will expectedly not have that
significant an impact, as the ExxonMobil oilfields produced only
46,000 barrels per day in 2013. However, SAFE union has stated that
the strike could be more widespread, if the required demands
ExxonMobil holds 100% interest in the Balder and Ringhorne fields,
while having a 45% stake in Jotun. The other partner in Jotun is
Dana Petroleum plc that holds 45% stake. The company has 77.4%
stake in Ringhorne East, which is tied to the Balder and Jotun
The union is targeting ExxonMobil as it has not yet executed an
early-pension plan for 31 employees who are members of the union.
ExxonMobil has declined to comment on any moves from its side.
At present, ExxonMobil carries a Zacks Rank #3 (Hold). Some
better-ranked oil and gas stocks worth considering include
EPL Oil & Gas, Inc.
Pembina Pipeline Corporation
). All of these stocks sport a Zacks Rank #1 (Strong Buy).
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