Brazil oil strike cuts production by 20%

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RIO DE JANEIRO: A strike at Brazil’s state owned oil giant Petrobras has reduced crude production by more than 20 percent, a union leader said on Tuesday (Wednesday in Manila).

The company said the production cut was much smaller, however.

The strike began October 24 over demands for wage increases.

“The strike has already reduced production by more than 20 percent and Petrobras will still not budge,” said Emanuel Cancella, head of the National Federation of Oil Workers.


That union is spearheading the strike and includes 40,000 of Petrobras’ 85,000 workers.

Tuesday night the company estimated crude oil production had fallen by 8.5 percent and gas by 13 percent.

But distribution is proceeding as usual and no market shortages are expected, the company said.

In September, Petrobras produced an average of two million barrels a day for domestic consumption.

Another oil workers union joined the strike on Sunday, said Cancella.

The striking workers are seeking an 18 percent raise and a productivity bonus, he said.

On Thursday the company offered an 8.11 percent raise. Negotiations were later suspended until further notice, said Cancella.

He asserted that several offshore oil platforms have been shut down and the company is trying to man them with unqualified people.

The strike is yet another headache for Petrobras as it grapples with a huge corruption scandal that has cost it more than $2 billion and has shaken the Brazil political establishment to the core.

Police have revealed that Brazil’s major construction companies formed a cartel to divvy up Petrobras contracts—overcharging it by one to 3 percent —in exchange for bribes paid to executives at the company, politicians and political parties.

AFP

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