Workers of Brazilian Oil Giant Petrobras Go on Strike

Petrobras's gas station Petrobras, Brazil's government-controlled oil and gas multinational announced that there is "no chance" a planned strike by its workers beginning this Monday, March 23, will limit the Brazil's fuel supply.

The oil company is ready to maintain fuel supplies during a walkout, refining and petrochemicals chief Paulo Roberto da Costa told reporters in Rio de Janeiro admitting, however, that "there may be a temporary drop in output because of a strike, fuel stockpiles will guarantee supply".

"There is no chance the Brazilian market will be without fuel because of the strike," da Costa said. "We have a contingency plan ready."

Brazil's oil workers confederation said this week it rejected a proposal from Petrobras on profit and revenue sharing, and workers plan to walk out starting today. Unions at refineries, offshore oil platforms and other units voted to strike for five days over bonuses and safety, union national coordinator João Moraes said on March 18.

During a July 2008 strike, output was cut in Brazil's Campos basin, the source of 85% of the country's oil, by as much as 400,000 barrels a day, or more than a fifth of the domestic crude oil production at the time.

A strike would come as Brazil seeks to boost output more than 14% this year and embarks on a US$ 174.4 billion five-year spending plan.

The Brazilian Oil Workers Federation, or FUP, said earlier Friday that workers had approved the five-day walkout in voting along the week.

"Petrobras and its service companies have reduced workers' rights, as well as declined to advance negotiations with FUP and other unions" union officials said in a statement. FUP is an umbrella union representing Petrobras operational employees across Brazil.

FUP said that the union would not accept "cuts to workers' rights in the name of a crisis in the international financial system, the burden of which companies are shifting to workers."

At the heart of the strike were complaints by FUP that Petrobras had decided to reduce profit-sharing payments after the company recorded record net profits in 2008. According to FUP, Petrobras offered profit-sharing payments lower than the previous four years, despite 2008's record profits.

The strike is the second major work action against Petrobras in nine months. In July, oil platform workers in Brazil's key Campos Basin walked off the job for five days amid a dispute over work rules. It was the first major strike at Petrobras since 2001.

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