Brazil Oil Workers, Petrobas Clash

Brazil Oil Workers, Petrobas Clash

RIO DE JANEIRO (AP) -- Brazilian oil workers and oil giant Petrobras are locked in a power struggle over plans to shift focus away from non-core assets, with a federation of unions saying on Tuesday that thousands of employees are on strike indefinitely.

Roughly one thousand people gathered outside the headquarters of state-controlled Petrobras in Rio de Janeiro, waving flags and protesting against recent layoffs at a fertilizer factory in the state of Parana.

"This will have an impact economically, in taxes, all sectors," Oséias da Costa a 35-year-old worker from the facility, known as Fafen, said in an interview. "This is a strike demanding the rights of Fafen workers and all the nation's oil workers, because of all the problems in Petrobras' administrative area."

Leftist political groups, including the Workers' Party, have also expressed their support for the strike, and their opposition to plans for privatization of company assets.

President Jair Bolsonaro appointed Roberto Castello Branco, a pro-market reformer, as Petrobras' chief executive, who with Economy Minister Paulo Guedes has advocated in favor of selling the firm's non-core assets. Petrobras says the fertilizer facility has been losing money and that shuttering it is a business decision, while oil workers have seized on the plan as a harbinger of coming hardship from the company prioritizing more profitable activities related to oil production.

The Unified Federation of Oil Workers said 21,000 employees in 13 states have joined the strike since it kicked off on Feb. 1 — about 60 percent of the company's workforce. The Fafen facility employs about 1,000 people.

Petrobras, contacted by The Associated Press, did not confirm those numbers.

The company has been able to maintain oil and gas production levels and meet fuel demand across the country by bringing in temporary workers on emergency contracts that often involve longer shifts.

The federation says 36 of Petrobras' 39 offshore platforms in the Rio de Janeiro region, as well as several refineries across the country, are now run by such contingency teams.

The movement suffered a blow Monday night, when Justice Ives Gandra of Brazil's Superior Labor Court ruled that the strike was illegal and ordered fines equivalent to $115,000 a day if it continues.

The federation, which is comprised of 13 unions, said it will appeal the decision.

A similar ruling last year by Justice Gandra was overruled by other members of the court, the federationsaid in a statement Tuesday, calling for the extension of the 18-day strike.

Earlier this month, Gandra argued that the strike had turned "abusive" because unions did not comply with an order to guarantee that at least 90 percent of the workforce would resume their activities. As a result, Gandra authorized Petrobras to contract emergency workers and avoid drops in production.

Analysts said the question remains how long that can last.

"I don't see any fuel shortages. Today we are able to bring in imported products," said Adriano Pires, director of a consulting firm, the Brazilian Center for Infrastructure. "If the strike goes on much longer, we could have a problem."

So far, Petrobras has discussed plans to sell eight refineries that make up about half of the country's refining capacity, as well as all logistical assets linked to those units.

"Petrobras' new administration has a divestment plan in areas that are not viable. The strike is an attempt to stop this process," Pires said.

(KR)