Brazil oil workers begin strike in new blow to government

RIO DE JANEIRO/SAO PAULO, May 30 (Reuters) - Brazilian oil workers began a 72-hour strike on Wednesday in a new blow to President Michel Temer following a nationwide trucker protest that has strangled Latin America's largest economy for over a week.

The strike is the latest challenge for state-led oil firm Petroleo Brasileiro SA, whose shares have plummeted nearly 30 percent since May 16 over fears that political interference would unwind more investor-focused policies.

Late on Tuesday, Reuters reported that Temer was considering an overhaul of a market-based fuel pricing policy at Petrobras, which could provoke even more investor flight.

SEE ALSO: US reportedly backs off new North Korea sanctions as talks about a future summit progress

The oil strike was declared illegal by Brazil's top labor court on Tuesday, but FUP, Brazil's largest oil workers union, said it had not been informed of the ruling and planned to go ahead with the stoppage.

Petrobras, as the company is known, said any disruption would not have an immediate major impact on its production or overall operations. According to a source close to the company, Petrobras has a significant stock of fuel on hand, especially as a 10-day truckers' strike has prevented significant amounts of fuel from leaving refineries.

16 PHOTOS
Brazil's oil workers go on strike
See Gallery
Brazil's oil workers go on strike
A combo shows people posing with a canisters with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. (Top L-R) Vieira bought gasoline to take her pregnant sister to the hospital, Henrique bought gasoline for his father who needed to go to hospital, Moraes bought gasoline for his family's car. (Center L-R) Francisco bought gasoline for his private motorcycle, Machado bought gasoline to drive to the hospital and get medicine, Dos Santos bought gasoline for her private car. (Bottom L-R) Miranda bought gasoline for a sick friend, Silva bought gasoline for his father's car and Rodrigues bought gasoline for a sick elderly woman. REUTERS/Ueslei Marcelino
An employee fills the tank of a car at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. REUTERS/Ueslei Marcelino
People wait in line to fill their canisters with fuel at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. REUTERS/Ueslei Marcelino
People wait in line to fill their canisters with fuel at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. REUTERS/Ueslei Marcelino
Men push a car to fill its tank at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. REUTERS/Ueslei Marcelino
A woman waits in line at a gas station in Porto Alegre, Brazil May 29, 2018. REUTERS/Diego Vara
Sergio Silva, 18, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Silva bought gasoline for his father's car. REUTERS/Ueslei Marcelino
Patricia Vieira, 23, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Vieira bought gasoline to take her pregnant sister to the hospital. REUTERS/Ueslei Marcelino
Paulo Henrique, 15, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Henrique bought gasoline for his father who needed to go to hospital. REUTERS/Ueslei Marcelino
Arlindo Miranda, 54, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Miranda bought gasoline for a sick friend. REUTERS/Ueslei Marcelino
Jose Francisco, 65, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Francisco bought gasoline for his private motorcycle. REUTERS/Ueslei Marcelino
Sebastiao Rodrigues, 54, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Rodrigues bought gasoline for a sick elderly woman. REUTERS/Ueslei Marcelino
Rodrigo de Moraes, 16, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Moraes bought gasoline for his family's car. REUTERS/Ueslei Marcelino
Jeferson Machado, 27, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Machado bought gasoline to drive to the hospital and get medicine. REUTERS/Ueslei Marcelino
Mireya dos Santos, 34, poses with a canister with gasoline after filling it at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. Dos Santos bought gasoline for her private car. REUTERS/Ueslei Marcelino
A woman holding a child waits to fill her canister with fuel at a gas station in the outskirts of Brasilia, Brazil May 29, 2018. REUTERS/Ueslei Marcelino TPX IMAGES OF THE DAY TPX IMAGES OF THE DAY
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

However, the strike has raised the specter of stoppages and protests spreading to more sectors as Brazilians vent frustration with an unpopular government and an uneven economic recovery.

The FUP said on Wednesday that workers did not show up at work at eight refineries stretching from Manaus in the Amazon to Rio de Janeiro in the southeast. They also walked off the job at plants handling lubricants, nitrogen and shale gas, as well as in the ports of Suape and Paranaguá.

"Initial information points to the workers having adhered to the strike at various locations," FUP said in a statement on Wednesday. "The movement is continuing through the morning, when stoppages at other Petrobras units are expected."

Petrobras, along with the federal government's solicitor general's office on Tuesday, had asked the country's top labor court to rule that any oil strike would be illegal, arguing it was being carried out mainly for political and not labor-related reasons.

TARGETING PARENTE

Unions representing oil workers said they were demanding the resignation of Chief Executive Pedro Parente. They also want the end of a market-based fuel pricing policy and other changes at Petrobras since Temer took power in 2016.

Adding to turmoil at Petrobras, the firm said on Wednesday that board member José Alberto de Paula Torres Lima had resigned, citing "personal reasons." He was one of three board members recruited by an outside agency and added to the board in April in an effort to establish its independence.

Petrobras did not immediately respond to questions about his departure.

FUP union leader José Maria Rangel said on Tuesday the Temer government and Parente's policies were delivering Petrobras up to foreign investors, while "the shipyards of Rio de Janeiro are closed" as unemployment remains near record levels.

Parente, on a Tuesday conference call with analysts, said Petrobras was taking action so that any strike would have minimal or no impact on production and operations.

A separate 10-day trucker protest against diesel price hikes has emptied roads and left major cities running short on food, gasoline and medical supplies, despite significantly easing on Tuesday night.

Officials warned it would take days to restore supply lines disrupted by the crippling stoppage that at its height saw over 1,000 roadblocks on highways across the country.

Temer's political situation has grown so tenuous as Brazil barrels toward a general election in October that he was forced to bat away concerns that a coup could topple his government.

"There is zero chance of military intervention," Temer told a small group of journalists during a roundtable at an investment conference in Sao Paulo. "What I see is a rejection both in the Defense Ministry and throughout the armed forces to any kind of military intervention." (Reporting by Marta Nogueira and Brad Brooks; Additional reporting by Gram Slattery in Sao Paulo; Editing by Brad Haynes, Peter Cooney and Susan Thomas)

Read Full Story