NEW DELHI Sep 4, 2006 (Dow Jones Newswires)
Officers of India's state-run oil companies will go on indefinite strikes from early Tuesday as talks with the government over higher wages failed, Oil Sector Association President Ashok Singh said Monday.
"The strike is on (from 0030 GMT Tuesday) - talks with the government have failed," Singh told Dow Jones Newswires.
Singh claimed the impact of the strike will be visible from the very first day, as refinery operations and oil production will be severely hit. Jet fuel supplies to aircraft at all airports across the country will also be stopped.
Gasoline and diesel sales will also be impacted by the strike.
Petroleum Minister Murli Deora told reporters that a contingency plan has been put in place to combat the strike.
"We will try to ensure that the upstream and downstream operations in the country aren't paralyzed (due to the strike)," said Deora.
An official at Oil and Natural Gas Corp., the state-run petroleum exploration company (500312.BY), said the company will lose about INR2.0 billion a day due to the strike.
It wasn't immediately clear how much oil production could be shut in as a result of the strike.
However, recent statements from oil sector executives say as much as 522,000 barrels a day could be shut in from Tuesday.
The oil sector officers 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 retroactively.
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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