Petrobras Workers Begin Strike

Brazilian oil industry workers employed by Petrobras started a strike at midnight on Tuesday, demanding a salary rise.

On Tuesday, the workers decided on a strike, which could continue until Sunday, unless Petrobras meets the demands by Wednesday morning. Petrobras officials were due to meet union leaders at 10:00 am local time.

The oilmen trade union represents some 34,000 workers across Latin America's largest country. Petrobras workers completely paralyzed oil production for one month in 1997, but since then they have rarely gone further than declaring a strike, finding a compromise with Petrobras on most occasions.

The workers now demand a bigger wage rise than the 6 percent that Petrobras had agreed to, claiming their labor category should get an 8.3 percent increase. They also want higher safety standards and an end to the practice of subcontracting in key areas.

In the first half of the year, Petrobras posted a profit of 5.4 billion reais ($2 billion). Petrobras said in a statement on Tuesday that it would meet with the workers and was open to dialogue but urged the workers against the "absolutely unjustified" strike, saying it would not be beneficial to the company or to the workers.

Petrobras produces about 1.4 million barrels of oil per day (bpd). The company has already said it would miss its year-end production target of an average 1.39 million bpd by 2 percent to 3 percent due to delays in obtaining an environmental license for an offshore rig. The strike should further limit production. An accident that sank the company's biggest platform in March had already forced Petrobras to review the target once, cutting it from 1.42 million bpd. But the company is still likely to exceed last year's output of 1.27 million bpd.