Argentina oil strike loses steam as unions split

OREANDA-NEWS. June 28, 2016. A strike that had threatened to paralyze Argentina's oil sector lost some steam last night after a key union accepted a wage offer, but production will still be affected in much of the country at least until the end of today.

The union representing workers in Neuquen, Rio Negro and La Pampa provinces curtailed a planned 48-hour strike to 24 hours after the Labor Ministry issued a resolution late last night ordering a 30pc increase in wages in three installments as well as a bonus of Ps15,000 (\\$1,007).

"Oil production is affected but a minimum number of workers will remain in the gas installations to make sure output continues," a union official said of the strike that is scheduled to continue until 7pm ET.

In Chubut and Santa Cruz provinces, unions warn that their 48-hour strike could be extended if their demands are not met.

"We are impacting production to defend the interests of workers," said Ramon Valenzuela, a Chubut union board member.

The uninterrupted gas production in Neuquen diminishes the threat of possible shortages in the middle of the southern hemisphere winter, when much of the population relies on the fuel for heating.

Labor strife is common during wage negotiations in Argentina, but oil companies had been particularly concerned about this strike because the unions appeared to be unusually united behind their demands.

Union leaders are scheduled to meet with oil company managers tomorrow in Buenos Aires to try to unlock the conflict.

Argentina produced 520,000 b/d in May, down from 536,000 b/d in the same month last year. Gas production averaged 122mn m3/d (4.3bn ft3/d) in March, an increase from 116.5mn m3/d in the same month last year, according to the latest available data from the energy ministry.