Brazil oil workers suspend strike, vote to approve deal with Petrobras: Sindipetro-NF

Oil workers in Brazil's offshore Campos Basin voted to approve a collective-bargaining agreement with state-led oil company Petrobras, ending a 16-day walkout that shuttered as many as 26 production platforms and floating production units in the region, the Sindipetro-NF union said Dec. 30.

"The strike fulfilled its role," said Sergio Borges, coordinator-general at Sindipetro-NF. We were able to reaffirm our political and union independence through this mobilization."

The assembly included nearly 500 Sindipetro-NF members, with 96% approving the deal, the union said. Union members also voted to maintain a permanent assembly and strike footing to ensure that Petrobras adhered to all negotiated commitments.

The strike started Dec. 15 after oil workers rejected a collective-bargaining contract proposal submitted by Petrobras on Dec. 9, according to the unions. In addition, workers protested the planned budget and payroll cuts at the company. Petrobras recently launched a voluntary retirement plan that seeks to reduce its workforce by about 1,100 people.

Petrobras has largely avoided any major labor-related disruptions in recent years, with most of the company's recent disputes limited to so-called warning strikes that typically feature work-to-rule actions, refusals to change shifts or requests to disembark from offshore production facilities. This strike, however, was the longest at Petrobras since February 2020, when oil workers staged a 21-day walkout.

In 2015, a 12-day strike cost the company about 125,000 b/d worth of output. That was only surpassed by a 32-day walkout in 1995 that is widely considered the worst labor action in the company's history.

Sindipetro-NF, which represents about 25,000 oil workers, was one of the few remaining holdouts in the latest labor dispute to hit Petrobras. A total of 13 unions accepted Petrobras' offer to end the strike during assembly votes held Dec. 26, according to the Unified Federation of Oil Workers, or FUP. FUP is an umbrella union that represents oil workers across Brazil and includes Sindipetro-NF as an affiliated member.

Petrobras, meanwhile, said Dec. 29 that 11 unions had approved the collective bargaining agreement, while five unions remained on strike.

Despite the majority of unions accepting the proposal, labor tensions increased after Petrobras obtained an injunction that imposed fines of $35,000/day on FUP and other unions that remained on strike in a Dec. 27 decision handed down by Brazil's Superior Labor Court. The court ordered the unions to maintain staffing at 80% of normal, pre-strike levels.

The fines were later rescinded by the same Labor Court judge after unions requested additional details about how to comply with the order, according to the National Federation of Oil Workers, or FNP. The FNP also represents oil workers in Brazil and works in affiliation with FUP and Sindipetro-NF.

The court also ordered Petrobras to provide staffing details to union officials, enabling the unions to comply with the 80% staffing requirement. According to FNP, Petrobras has rejected previous requests from union officials for the same information during previous labor disputes.

Concerns about court case

The Labor Court judge also scheduled a conciliation session for Jan. 2 and a court hearing for Jan. 6, which raised concerns with union officials, according to FUP and Sindipetro-NF. Normando Rodrigues, a legal consultant with Sindipetro-NF, told union members during the assembly that previous court decisions had been unfavorable to workers and undermined gains made in prior collective-bargaining agreements.

FUP also noted that the court decision could include punishments, such as lost wages or benefits, for workers who participated in the strike.

The strike affected 28 platforms and floating production units offshore Brazil, with 26 located in the Campos Basin and linked to Sindipetro-NF. The strike also affected nine Petrobras-operated refineries; 12 logistics terminals operated by Petrobras subsidiary Transpetro; the Cabiunas natural gas treatment center, known as UTGCAB; the Paulinia gas compression station operated by Transportadora Brasileira Gasoduto Bolivia-Brasil, or TBG; three thermal power plants; two biodiesel plants; and the Polo Bahia Terra complex of onshore oil and gas fields, according to union officials.

However, Petrobras told Platts, part of S&P Global Energy, on Dec. 29 that the walkout did not have any impact on oil and natural gas production or refinery output. The company activated contingency teams where necessary to maintain operations. That was in line with estimates from industry officials, who also said that the strike's impact would likely be limited.

Brazil's production profile is dominated by production sharing fields in the subsalt region, where many of the floating production units are leased by Petrobras from international operators. Brazil's subsalt accounts for about 80% of the country's oil and gas production, according to the National Petroleum Agency.