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Brazil oil strike broadens, no output cuts seen

Brazil oil strike broadens, no output cuts seen

Write: Billie [2011-05-20]
RIO DE JANEIRO - Brazil's main oil workers' federation will begin a 48-hour nationwide strike on Thursday without interrupting production, union leaders said after a vote on Tuesday.

The strike seeks more profit sharing and is in solidarity with a separate 5-day work stoppage that oil workers started on Monday in the Campos Basin.

Brazilian energy giant Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz)(PBR.N: Quote, Profile, Research, Stock Buzz) said on Tuesday its oil production was back at full capacity, despite the Campos Basin strike that had helped to push up world oil prices in recent days.

During the planned nationwide strike, oil workers intend to block access to refineries, said Jose Genivaldo da Silva, director of the United Oil Workers' Federation (FUP).

"I'm sure (Petrobras) will prepare contingency teams for the refineries as well but our intention is not to stop production but to protest," said da Silva.

The federation would decide next week whether it would launch yet another strike designed to halt production.

The Campos basin affected by the strike accounts for more than 80 percent of Brazil's crude output of 1.8 million barrels per day. Petrobras implemented a contingency plan to shore up output with emergency staff on most platforms in the basin.

By late Monday, the company was producing at 96 percent of capacity. After resuming operations Monday night at the last platform affected by the strike, production had returned to normal by early Tuesday, it said.

A spokesman for Petrobras said production was expected to remain at full capacity until the end of the five-day strike, which started at midnight on Sunday.

"It has already reached 100 percent," the spokesman told Reuters.

Aviraldo Menezes, director of the Norte Fluminense Oil Workers Union, which represents workers on platforms in the Campos Basin, said the emergency crews could have problems maintaining output levels.

"Petrobras has thin staffs that are not the best qualified people on those platforms. If something goes wrong, it will be a big problem," he said.

Officials from the union representing workers in the Campos Basin and Petrobras said on Tuesday they would meet on Wednesday to discuss ways to end the walkout. The strikers want Petrobras to count the day employees leave a platform for shore as a paid work day.

A five-day nationwide strike by Petrobras workers in 2001 seriously reduced output and forced Brazil to import additional oil. Unions and the company have resolved their differences over the past few years without stoppages hurting production.

Concerns over the strike helped push world oil prices to a new record on Friday above $147 a barrel, even though the stoppage was unlikely to reduce international oil trade.

On Tuesday, concerns about falling demand for crude oil in the United States, the world's top energy consumer, overshadowed the strike in Brazil.

U.S. crude CLc1 tumbled $7.30 to $137.88 a barrel in the early afternoon, while London Brent crude LCOc1 fell $6.37 to $137.55.