Brazil three-week oil strike winds down

OREANDA-NEWS. November 24, 2015. A prolonged strike by Brazilian oil workers that cost state-controlled Petrobras around 120,000 b/d in crude production is winding down today, with more dissident unions voting to return to work.

The strike that started on 1 November is the longest to hit the Brazilian oil industry in two decades.

Beyond wage demands, the workers want Petrobras to scale back a restructuring and divestiture plan that is sure to cost jobs.

On 11 November, Petrobras and the FUP, a federation of oil workers unions, struck a deal for a 9.53pc pay raise and the creation of joint technical committee tasked with analyzing union-supported changes to the company's 2015-19 business plan.

On 13 November, that proposal was presented to autonomous regional unions for final approval. Of the 17 union represented by the FUP and rival federation FNP, 10 approved the proposal while the remaining seven held out over back pay.

The most important of these dissident unions was Sindipetro-NF in Rio de Janeiro state, which represents workers in the offshore Campos basin. Today, Sindipetro-NF members voted to end the strike.

"Never again will they dare attempt to deliver the company without waiting for a strong reaction from oil workers," the Sindipetro-NF union said of Petrobras' plans.

Workers at Petrobras' onshore bases in the Campos basin are expected to return to work today, while workers from the 51 offshore platforms that participated in the work action should return over the weekend.

The Campos basin accounts for most of Petrobras' 2.1mn b/d of domestic production. The interruption of Campos basin operations accounted for the bulk of the almost 2.4mn bl of accumulated crude production that Petrobras said it lost as a result of the almost three-week strike.

The FUP?s estimates of lost production were consistently higher over the course of the strike. The downstream impact was more muted.

Other regional unions that rejected the FUP's 13 November call to end the strike will vote on Petrobras' proposal tonight. Among them, Sindipetro-ES in the offshore Espirito Santo basin, and Sindipetro-LP in Sao Paulo state and the offshore Santos basin.

A few foreign oil companies were affected by the work action, including US major Chevron.