A labor strike that shut in 40pc of the oil and natural gas production of Argentina's state-controlled YPF over the weekend has been called off, although future work stoppages are likely as the underlying conflict looks no closer to a resolution.
The strike took place in the southern provinces of Chubut and Santa Cruz.
"Activity should begin to normalize within the framework of the mandatory conciliation" ordered by the Labor Ministry, said Leandro Moyano, a director at the Chubut province oil workers union.
Union and YPF representatives are scheduled to hold a meeting at the Labor Ministry tomorrow, although company officials warned that unless union representatives are now willing to relent on some of their demands, more conflicts are likely inevitable.
A total of 55 drilling and workover rigs were paralyzed as a result of the strike actions that started at midnight on 27 May.
YPF, Argentina's largest producer, accounted for 582,300 b/d of oil equivalent (boe/d) in the first quarter.
The end of the strike does not mean YPF will be able to immediately restart production.
"There was vandalism in all the oil fields, so now we have to send in a group of people to evaluate the situation," a YPF official said, noting that activity was unlikely to resume at full capacity until 1 June.
The unions accuse YPF of seeking to idle 15 rigs in Chubut and Santa Cruz.
The YPF official denied the union´s interpretation and said it has refused to accept the decreased level of activity that has accompanied the plunge in crude prices over the past two years.
The unions reject a so-called crisis prevention plan that was accepted by the unions in south-western Neuquen province. Under the plan, some workers receive 50pc of their wages to stay home.
YPF has also offered to decrease working hours as a way of ensuring the number of jobs remains stable.
"They have rejected everything. They want everything to stay the same and on top of everything to receive wage hikes of 40pc," the YPF official said.
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 at a time when annual inflation is running at around 40pc.
