Oil Strike Brazil Unk-*

[reviewed]

March 25, 2002

Americas

Oil Workers Paralyze Brazilian Oil Output

At Start of Five-Day Strike for Higher Pay

Dow Jones Newswires

RIO DE JANEIRO -- A strike by Brazilian oil workers that started in the early hours of Wednesday led to a cut of 60% in Petroleo Brasileiro's total daily production compared with Tuesday's data, a company spokeswoman said.

Petrobras, as the company is known locally, said total oil output reached 550,000 barrels Wednesday from Tuesday's 1.383 million barrels. On the oil-rich Campos Basin, where 37 out of 38 oil rigs were idle Wednesday, production dropped 72% to 250,000 barrels Wednesday from 1.05 million barrels Tuesday.

The Campos Basin alone is responsible for 80% of Brazil's total 1.4 million-barrels-a-day oil output.

Eight of the company's 11 refineries also stopped production, as well as several Petrobras-run petrochemicals factories throughout the country, the federation said.

Petrobras did not confirm the claims of the federation, which represents 20 unions and about 35,000 oil workers.

Brazil's oil workers, who are largely employed by government-run Petrobras, halted production in demand for a salary increase after the oil giant offered them a 6% hike. The strike is scheduled to end Sunday.

The workers' union, known as FUP, is demanding a 8.3% wage hike to adjust salaries for inflation in the September 2000-August 2001 period, a 42.58% increase to compensate workers for losses with the Real economic recovery plan -- in effect since 1994 -- and a 17.41% increase for higher productivity in the company last year.

Workers also are asking for better working conditions and the end of outsourcing practices in substitution of permanent employees, among other pleas.

After failed talks earlier Wednesday, union leaders and company officials returned to the negotiating table in the afternoon and still haven't reached an agreement, the spokeswoman said.

The company said fuel supply is guaranteed, as Petrobras has enough products in stock to last through the strike.

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