Labor strike shuts in 40pc of YPF production

OREANDA-NEWS. May 30, 2016. A labor strike in two southern Argentinian provinces has shut in 40pc of the daily production of Argentina's state-controlled YPF, the company said yesterday.

YPF, Argentina's largest producer, accounted for 582,300 b/d of oil equivalent (boe/d) in the first quarter.

A total of 55 drilling and workover rigs are paralyzed as a result of the strike actions that specifically target the company and "break with the framework of dialogue and interrupt the ongoing negotiations," YPF said, asserting that the unions ignored a period of conciliation mandated by the Labor Ministry.

Oil workers in Chubut and Santa Cruz provinces unexpectedly launched a strike action at midnight on 27 May, accusing the company of trying to cut back its activity without negotiating with the workers.

The two affected provinces will "lose more than \\$1mn/day in terms of royalties and taxes," the company added.

On top of the suspended production, a blockade launched by the teamsters' union in the fuel distribution center at Comodoro Rivadavia in Chubut means there could soon be shortages across the region, YPF said.

"Let us see what happens on Monday … how they will fix the situation so we can sit down at a table" to negotiate, said Jorge Avila, secretary general of the Chubut oil workers union.

The strike comes as companies and workers are discussing salary hikes at a time when annual inflation is running at around 40pc.

Union leaders say oil companies are using the threat of reduced activity and job losses in order to get them to agree to lower salary increases.