Image courtesy of Petrobras/Flickr.

The largest oil workers’ union in Brazil declared an open-ended strike on Sunday against Petrobras to protest the company’s cost reduction plans.

According to Reuters, the FUP oil union joined several smaller unions that had already declared strikes and began its own industrial action around 3 p.m. local time.

State-owned Petrobras told the news wire that the strike will not affect oil production or refining activities.

The unions are protesting a debt reduction plan that calls for Petrobras to sell up to $15.1 billion worth of assets and slash its 2016 budget down to $19 billion, a 30 percent reduction.

The unions want the company’s asset sale plans canceled and has called for Petrobras to resume work on refineries, to maintain local content rules and to guarantee that it remains the only operator in Brazil’s offshore sub-salt play.

FUP said the move came after more than 100 days of negotiations with debt-plagued Petrobras.

The company has said it is open to meeting with union members, Reuters added.

Petrobras told Bloomberg it has also offered workers an 8.1 percent wage adjustment.

Petrobras, already the most indebted oil company in the world, is reeling from an ongoing corruption scandal that forced former CEO Maria das Gracas Silva Foster to resign earlier this year.

Brazilian prosecutor said last month that Petrobras losses tied to corruption will likely reach over $5.3 billion, or about 20 billion reais, including losses and illicit profits earned by engineering firms through overcharging and price fixing.

The Keppel Corporation confirmed last week that its Brazilian subsidiary, Keppel FELS Brasil, may be investigated for connections to the ongoing Petrobras corruption probe.

Keppel has denied any wrongdoing.

The probe has also prompted several investors lawsuits including one filed by the Bill and Melinda Gates Foundation Trust against Petrobras and its auditor that claims corruption caused the trust to lose millions of dollars.

Petrobras has defended itself against the allegations and claims that it was also a victim of fraud.



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