Brazil oil workers begin strike

A five-day strike by workers at Brazil's state-run oil company, Petrobras, is under way, raising fears of further pressure on oil prices.

The firm is playing down the potential impact of the dispute, which is over offshore working conditions.

The management say there is a contingency plan to maintain output.

But a union spokesman said while management would do everything they could to maintain production workers would do their best to disrupt it.

The strike by employees at the 42 oilfields in the Campos basin off the coast of the state of Sao Paulo went ahead ahead after talks last week ended without agreement.

At the heart of the dispute is a union demand that a day spent travelling from oil platforms to the mainland should be counted as work.

At the moment employees are paid for a shift of 14 days followed by 21 days of rest.

Bigger slice

The Campos basin accounts for 80% of Petrobras' daily production of 1.8 million barrels of oil.

But the company president, Jose Sergio Gabrielli, has been playing down the impact of the dispute saying that daily variations in oil prices do not have a great significance.

World oil prices on Friday hit a new record high, rising above $147 a barrel because of a range of factors, such as tensions over supplies from Iran and Nigeria.

But analysts said the potential strike at Petrobras was also having an impact.

The situation has the potential to escalate as further disruption is being discussed at all Petrobras facilities, including refineries and terminals, as part of union demands for a bigger share of profits for employees.

The company has recently announced a number of major oil finds offshore, which have attracted huge international attention.

But these are deep beneath the seabed and the costs of production, which is still several years away, are expected to be high.