Brazil Oil Workers to Vote on Wider Petrobras Strike

RIO DE JANEIRO - Brazilian oil workers will vote to approve a five-day strike at state-run energy company Petroleo Brasileiro, or Petrobras, that would likely interrupt oil production at the company, a union official said Friday.

The strike is tentatively scheduled to start Feb. 20, said Joao Antonio de Moraes, general coordinator for the Brazilian Oil Workers Federation, or FUP. FUP is an umbrella union representing about two-thirds of Petrobras's 80,000 employees.

If approved, the strike would come at a delicate time for Petrobras. Petrobras has struggled with flagging crude-oil production over the past year because of declining recovery rates at mature fields and maintenance shutdowns at ageing offshore platforms. The company's finances have also been stretched because of heavy imports of gasoline and diesel fuel that the company is forced to sell at a loss in the domestic market.

Petrobras reports fourth-quarter earnings results Monday, with year-on-year net profits expected to rise about 20%. The company's full-year profit, however, is expected to be the worst in nearly a decade.

Workers are protesting Petrobras's latest profit-sharing offer, which the union contends short-changes workers to the benefit of shareholders. Workers could accept a lower slice of Petrobras's profits if the company also reduced dividends paid to shareholders, Mr. Moraes said.

"The negotiations are very difficult" this year, the union chief added. While FUP has sought out further negotiations with Petrobras and the government, nothing has been scheduled so far, Mr. Moraes said.

Petrobras said that it used the same criteria for its profit-sharing proposal as previous years. "The company remains open to negotiations with labor groups so that all parties may come to an understanding," Petrobras said in an email.

The broader strike would follow a 24-hour "warning" strike held Monday. Workers declined to change shifts at refineries and terminals, while workers at offshore platforms only performed routine duties. The strike did not aim to affect production, union officials said.

That's not the case this time around, Mr. Moraes said. "It's safe to say that production will be affected by a strike lasting five days," Mr. Moraes said.

The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of crude oil production per day.

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