SAO PAULO, Sept 30 Brazil's state-led oil
company Petrobras is unable to give its workers raises similar
to those that increased pay by about 50 percent in real,
inflation-adjusted terms over the past decade, Chief Executive
Pedro Parente said on Friday.
Petroleo Brasileiro SA, as Petrobras is formally
known, is in annual pay talks with its unions, but Parente said
that at least some employees understand the need for the
financially troubled, heavily indebted company to limit pay
In the face of nearly $125 billion of debt, falling oil
prices and a corruption scandal, Parente has moved to slash
capital spending, cutting Petrobras' average annual investment
budget by more than two-thirds to less than $15 billion today
from $47 billion in 2013.
At the same time Petrobras has cut its direct and
third-party contract work force by more than half to fewer than
237,000 from 445,000.
Members of FUP, the largest federation of Petrobras unions,
this week rejected a one-year pay increase of 4.87 percent, a
number far below Brazil's 8.98 consumer price inflation rate for
the 12 months ending in August.
FUP has also put its members on strike warning as it
continues talks with Petrobras. If it walks off this year it
will be the second walk-out in two years.
The union though says its campaign is only partly about
salary. It is campaigning hard against company budget cuts and
plans to sell about $35 billion of assets by the end of 2018, a
program it considers the privatization of a key natural
That plan, and the layoffs it threatened, was the main
reason behind the strike last year, the biggest in 20 years. The
strike was the first to significantly impact production in
At its peak, last year's 20-day strike cut average daily
output by about 115,000 barrels a day, or about 5 percent of
pre-strike output. In the end, though, the strike was only able
to cut total November output by about 1.3 percent.
In August, Petrobras produced 2.84 million barrels of oil
and equivalent natural gas a day.
(Reporting by Luciano Costa and Jeb Blount, writing by Jeb
Blount in Rio de Janeiro; Editing by Chizu Nomiyama and Cynthia