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Oil workers in one of Argentina's most productive basins will go on strike for 48 hours next week to protest a decision by state-run YPF to not return 33 rigs to the field, which could cost 1,700 jobs, union leaders said Friday.

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Guillermo Pereyra, a national senator who doubles as the secretary general of the Union of Private Oil Workers in Neuquen, Rio Negro and La Pampa, said the strike is to start Monday at 8 am local time.

"The strike will affect all activities" in the Neuquen Basin, he said in a televised news conference.

The southwestern basin produces 40% of the country's 513,000 b/d of crude and 57% of its 124 million cu m/d of gas, according to data from the Argentine Oil and Gas Institute, an industry group.



Pereyra said the action is the start of a campaign to resolve worker complaints of layoffs, poor work conditions, an increase in the number of accidents in the fields and inadequate responses from YPF.

If things do not improve, 'we will deepen this measure and it will be for 72 hours," Pereyra said, suggesting that it could even be extended for longer.

Separately, Manuel Arevalo, secretary general of a union for field managers that will also participate in the strike, said YPF's decision to not bring back the rigs has made it harder to negotiate with the company.

"You cannot negotiate when there is a threat of layoffs," he said on LU5, a radio station in Neuquen.

The decisions to walk off the job comes a day after YPF, the country's biggest oil and gas producer, said it would not bring 33 rigs back into the field after sidelining them in February. The company had been paying the 1,700 rig workers since.

YPF said it could no longer afford to pay the suspended workers, which totalled an annualized amount of $100 million, and would instead focus its drilling on fields with the best potential for production.

The 33 rigs had been working in maturing conventional fields, and the company has said it will focus on assets with the greatest growth prospects, such as in the Vaca Muerta shale play and the Lajas and Mulichinco tight plays.

"We have to concentrate on investments where it pays and pays quick," YPF CEO Ricardo Darre said in August.

YPF has slashed its capital-expenditures plan by 20%-25% for this year, leading it to forecast flat production for 2016 on the year.

It has since said the outlook for no growth in its overall hydrocarbon output could continue through 2017, as a decline in international oil prices for much of this year has brought down local crude prices, cutting profit margins. At the same time, a recession in the nation has left little margin to raise diesel and gasoline pump prices to finance exploration and production. There also is little margin for YPF the take on more debt, according to the company.

YPF produces 45% of the country's oil and 31% of its gas, according to industry data.

--Charles Newbery, newsdesk@platts.com

--Edited by Derek Sands, derek.sands@spglobal.com