May 4, 2011 / 3:08 PM / 8 years ago

UPDATE 4-Argentina orders talks to cool energy protests

* Refinery workers must continue talks, strike postponed

* Government orders truck drivers back to work

* High inflation fueling wage demands again this year (Recasts with government extension of talks for refineries)

By Nicolas Misculin and Hugh Bronstein

BUENOS AIRES, May 4 (Reuters) - Argentina’s government acted swiftly on Wednesday to defuse labor strikes threatening fuel supplies, but protests continued to hamper oil output in Santa Cruz province, unions and industry sources said.

The Labor Ministry extended talks between refinery workers and energy companies by another five working days and ordered compulsory conciliation for truckers who briefly halted fuel distribution in Buenos Aires province over pay demands.

Argentina’s energy supplies are stretched thin due to burgeoning demand in a booming economy and lagging private investment attributed to low domestic fuel prices.

The refinery workers’ union, which is pushing for a 36 percent pay hike, had set a deadline to strike at midday (1500 GMT) on Wednesday if no deal was reached. But the labor action was postponed.

“Company officials are going to improve their offer and the ministry has ordered five more days (of mandatory talks),” Pedro Milla, an official with Argentina’s Federation of Oil, Gas and Biofuels Workers, told Reuters.

The truckers who halted fuel distribution will not be able to strike over the next five working days either, according to the terms of the government’s compulsory conciliation, which expires on Wednesday of next week.

“On the sixth day, when the conciliation expires, we will pull out the stops. We will halt all the oil companies in the country,” said Pablo Moyano, a top official at the powerful truckers’ union.

Annual inflation of roughly 25 percent has fed pay demands in Argentina and increased the risk of strikes less than six months from a general election, in which center-left President Cristina Fernandez is expected to seek a second term.

Problems also persist in the Patagonian province of Santa Cruz, which produces nearly 20 percent of Argentina’s crude. Some oil wells have been idle for days as picketing schoolteachers blocked roads. Security guards who work at most northern Santa Cruz oil fields also joined the work stoppage.

“It’s a very confusing situation,” one industry source told Reuters, asking to not to be named. “There’s also a strike by oil tanker crews.”

These latest protests in Santa Cruz come on the heels of a nearly month-long strike by provincial energy workers, whose union is badly divided. [ID:nN26302313]

That strike cost the country about $300 million and affected oil production at Repsol’s YPF (REP.MC)(YPFD.BA), China’s Sinopec Corp (0386.HK) and Pan American Energy, which is co-owned by Argentine and Chinese interests.

The biggest refinery operators in Argentina are YPF, Royal Dutch Shell (RDSa.L), Petrobras (PETR4.SA) and Exxon Mobil Corp (XOM.N) under the brand name Esso.

The country’s refining capacity tops 600,000 barrels per day (bpd) of crude oil. (Additional reporting by Luis Andres Henao, Alejandro Lifschitz and Magdalena Morales; Editing by David Gregorio and Sofina Mirza-Reid)

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