Petrobras CEO Says Wage Hikes Of Last Decade Are Impossible Today
SAO PAULO, Sept 30 (Reuters) - Brazil's state-led oil company Petrobras is unable to give its workers raises similar to those that increased pay by about 50 percent in real, inflation-adjusted terms over the past decade, Chief Executive Pedro Parente said on Friday.
Petroleo Brasileiro SA, as Petrobras is formally known, is in annual pay talks with its unions, but Parente said that at least some employees understand the need for the financially troubled, heavily indebted company to limit pay increases.
In the face of nearly $125 billion of debt, falling oil prices and a corruption scandal, Parente has moved to slash capital spending, cutting Petrobras' average annual investment budget by more than two-thirds to less than $15 billion today from $47 billion in 2013.
At the same time Petrobras has cut its direct and third-party contract work force by more than half to fewer than 237,000 from 445,000.
Members of FUP, the largest federation of Petrobras unions, this week rejected a one-year pay increase of 4.87 percent, a number far below Brazil's 8.98 consumer price inflation rate for the 12 months ending in August.
FUP has also put its members on strike warning as it continues talks with Petrobras. If it walks off this year it will be the second walk-out in two years.
The union though says its campaign is only partly about salary. It is campaigning hard against company budget cuts and plans to sell about $35 billion of assets by the end of 2018, a program it considers the privatization of a key natural resource.
That plan, and the layoffs it threatened, was the main reason behind the strike last year, the biggest in 20 years. The strike was the first to significantly impact production in recent memory.
At its peak, last year's 20-day strike cut average daily output by about 115,000 barrels a day, or about 5 percent of pre-strike output. In the end, though, the strike was only able to cut total November output by about 1.3 percent.
In August, Petrobras produced 2.84 million barrels of oil and equivalent natural gas a day.
(Reporting by Luciano Costa and Jeb Blount, writing by Jeb Blount in Rio de Janeiro; Editing by Chizu Nomiyama and Cynthia Osterman)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension