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Petrobras, Oil Worker Talks Fail, Strike Continues

Reuters
Thursday, 17 Jul 2008 | 4:13 AM ET

Oil workers at Brazil's state-run energy company will remain on strike for two more days after failing to reach agreement in talks with Petrobras, a union spokesman said on Wednesday.

"There is no agreement, the standoff continues," Jose Maria Rangel, coordinator of the Norte Fluminense Oil Workers Union, told Reuters on the third day of a five-day strike.

Oil workers in the Campos Basin, which accounts for nearly 85 percent of Brazil's crude output, started the strike at midnight on Sunday over demands that days on which workers depart from oil platforms be counted as paid work days.

Petrobras said in a statement on Wednesday night that it made a new proposal which the union would consider in its next assembly.

Currently, workers spend 14 days on a platform and 21 days at home.

On duty they are entitled to 11 hours rest but in practice they sometimes get less, said Rangel.

The union began dampening production in the Campos Basin at midnight on Sunday, reducing Petrobras daily output by 300,000 to 400,000 barrels initially.

But the company quickly dispatched emergency crews, and said they brought production back up to normal output of 1.8 million bpd by early Tuesday.

Petrobras said the contingency teams could maintain output at full capacity for the duration of the strike.

But a nationwide solidarity strike is scheduled to begin on Thursday and Friday after a broad union for oil workers voted to proceed with a protest for more profit-sharing benefits.

The FUP umbrella union for oil workers said the strike would not stop production, but could cause disruptions to operations at refineries or other installations.

"We also share the demands of the FUP union for better profit sharing and if Petrobras does not address this, FUP will meet on July 24 to vote on an extended strike scheduled for Aug. 5 that will affect production," Rangel said earlier.

In response to the strike that was to begin at midnight on Wednesday, Petrobras launched a contingency plan that is to ensure full supply to the market, the company said in a statement.

A five-day nationwide strike by Petrobras workers in 2001 slashed output and forced Brazil to import more oil.

Unions and the company have resolved differences over the past few years without stoppages hurting production.

U.S. light crude futures traded down on Wednesday after tumbling $6.44 to close at $138.74 on Tuesday after its largest one-day price fall in 17 years.

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