NEW DELHI Sep 1, 2006 (Dow Jones Newswires)
The Indian government Friday said it is preparing a contingency plan to prevent a total shutdown of oil production and refining operations following a threat from executives at state-run firms to go on an indefinite strike from Tuesday.
"We are trying to put together a crisis management team that can take care of any eventuality," said a senior government official who is involved with negotiations with the Oil Sector Officers' Association that has threatened to go on strike to press for higher wages.
Petroleum Minister Murli Deora told Dow Jones Newswires that every possible effort will be made to avert the strike.
The Petroleum Ministry has initiated a dialogue with OSOA representatives and the minister said he hopes there will be a positive outcome.
"We'll spare no efforts (to avert the strike)," said Deora.
Meanwhile, the managements of Indian Oil Corp. (530965.BY) and Oil & Natural Gas Corp. (500312.BY) have obtained a stay order from the Delhi High Court against the strike.
In the event that the strike does happen, it's not clear how much oil production could be shut in as a result.
However, recent statements from the oil sector executives say as much as 522,000 barrels a day could be shut in from Tuesday.
Earlier Friday, R.P. Shrivastava, coordinator of OSOA, said: "Unless there's an assurance from the government that our demands will be met, we'll ensure that the refineries start cooling (shutting down) from Sept. 4, LPG (liquefied petroleum gas) plants are shut, and no flights take off Sept. 5 onward."
OSOA said the Petroleum Ministry had failed to implement an agreement that has been in place since 2000 to increase the pay of oil executives. The OSOA wants salary increases to be paid retrospectively.
The OSOA represents officials in all 13 state-run oil companies and says it has a membership of 45,000 that includes all ranks of officers up to the level of executive director.
Oil market participants are nervously watching the oil supply balance, given the strike threat in India and a planned three-day strike by Nigerian oil workers starting Sept. 13. The two strikes threaten to shut in large volumes of oil output.
Copyright (c) 2006 Dow Jones & Company, Inc.
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