Union Threatens Strike at Brazil's Main Oil Fields

A key Brazilian oil workers' union threatened Thursday to shut down Petrobras oil fields in the Campos basin that produces over 80 percent of Brazil's oil for five days starting from Monday.

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Jose Maria Rangel, coordinator of the Campos basin oilmen union, told Reuters the strike on all 42 Campos basin offshore platforms was called to press state-run oil company Petrobras to count the day workers leave the platform for the shore as a working day.

"It's a discussion that has been dragging on for 10 years," he said.

"It's a serious issue, the day of the disembarking, and we are prepared to strike this time." Campos accounts for over 80 percent of Brazil's oil output.

Petroleo Brasileiro pumps around 1.8 million barrels per day of crude in Brazil and accounts for nearly all crude production and refining in Latin America's largest country.

Petrobras stocks slumped 3.4 percent in early trading on Thursday and oil prices rose above $137 a barrel after the strike plan was announced.

Petrobras officials said they did not know of any strike plans since a 24-hour warning strike on July 1.

A five-day nationwide strike of Petrobras workers in 2001 seriously reduced output and forced Brazil to import additional oil.

But unions and the company have managed to resolve their differences over the past few years without production-affecting stoppages.

A year ago, unions called off a five-day stoppage plan after accepting a sweetened company proposal on job promotions.

Rangel could not give an estimate on the potential effect on production from the planned strike as most platforms have to keep producing at least some oil and gas to generate power for their own needs.

"Certainly, Petrobras will also try to get its contingency teams on the platforms. We'll be trying to stop production as much as possible, they'll be trying to maintain it," Rangel said, adding that the union expected to negotiate a minimum production quota with the labor authorities.

Separately, the United Oil Workers' Federation (FUP) umbrella union plans to hold a meeting on Tuesday to discuss the possibility of a five-day nationwide strike at all Petrobras facilities, including refineries and terminals, to demand a bigger share of company profits for workers.

The company presented a proposal on Wednesday, which FUP said was too small.

"We want at least 18 percent of what is paid to shareholders, while they are proposing a maximum of 12.8 percent. Our share has been going down over the past years despite great results at the company," said Jose Genivaldo Silva, a FUP director.

After the 24-hour warning strike without output stoppages on July 1, Petrobras called the union labor protest a hasty measure and called for talks to look for a solution.

Its profits and market capitalization have been rising over the past few years, helped by rallying world oil prices and new production.

Its costs, including with labor, have also jumped due to high oil equipment and services prices.

Petrobras has said the share of profit paid to employees in 2007, of 844 million reais ($527 million), was compatible with the profit and dividends paid to shareholders, while smaller individual payouts were due to a rise in the number of employees.