Occidental Petroleum, the fourth-largest U.S. oil company, has reached an agreement with workers in Colombia that will help dodge a possible strike that would have crimped production at the Cano Limon oil field, which accounts for just over 10% of the country's daily output.
California-based Occidental (OXY) was faced with threats of a work stoppage earlier this month after employees said the company's new labor proposal would significantly slash their pre-tax income.
Tarsicio Mora, head of CUT, Colombia's largest trade union federation, said a labor agreement will be signed later Monday that includes a 5.7% salary increase for this year followed by a raise next year equal to the consumer price inflation rate plus an additional percentage point, according to the Wall Street Journal.
Occidental found Cano Limon in 1983 and the field has turned into one of Colombia's most important, turning out 1 billion barrels of crude since it was initially discovered, the Journal reported. Colombia is South America's third-largest oil producer behind Venezuela and Brazil.