Norway Oil Strike Could Escalate Quickly -union

More than 300 workers on strike; conflict involves pay of more than 6,500 union members.

A strike involving Norwegian oil service workers could be expanded at any time, but no decision has yet been made on whether to escalate the dispute, trade union Industri Energi said on Thursday.

"We're satisfied with the current level of the strike but are monitoring continuously and can't rule out further escalation at very short notice. It could happen at any time," union official Ommund Stokka told Reuters.

"I won't rule out an expansion ahead of the weekend," he added.

State-mediated wage talks broke down on Sept. 21, triggering the strike among more than 300 workers at the Norwegian units of Schlumberger (SLB), Halliburton, Baker Hughes , Oceaneering and Oceaneering Asset Integrity.

The negotiations were on behalf of about 6,500 union members at around 30 companies.

The strike affects the operations of subcontractors to the oil industry, and could have consequences for oil and gas output in the case of prolonged industrial action, the union and employers have said.

The union has so far targeted drilling operations, while the output of oil and gas has been allowed to continue, making it less likely that the government will apply emergency powers to intervene in the strike.

"We see that the strike is affecting the drilling of wells, as intended," Stokka of Industri Energi said.

The Norwegian Oil and Gas Association (NOG), which negotiated on behalf of employers, has said more than 350 workers face temporary layoffs as a direct result of the halt in drilling operations.

Six or seven exploration rigs have been idled by the strike, as well as the drilling of new wells at some production platforms, NOG said.

"There's very little dialogue between the parties at the moment, NOG chief negotiator Jan Hodneland told Reuters, while adding he was ready to resume talks at any time.

"Each strike is unique, but in 2006 we had a similar one that lasted for six weeks. I was hoping we could resolve things more quickly this time, Hodneland said.

Norway is western Europe's top oil and gas producer, with state-controlled Statoil (STO) its largest firm.

By Joachim Dagenborg