Kuwait oil workers strike enters Day 3

Kuwait City : A strike by oil workers that has slashed Kuwait's output entered its third day on Tuesday but the state oil firm said it had managed to restore some affected production.

Kuwait Petroleum Corp. spokesman Sheikh Talal Khaled Al-Sabah said output was now running at 1.5 million barrels per day -- 50 percent of normal output -- against 1.1 million bpd when the strike first erupted on Sunday.

Sheikh Khaled said a crude gathering centre in the north of the emirate had been put back into production and that the company had plans to reopen three more.

He did not specify how they were being staffed but on Sunday the cabinet gave orders for KPC to recruit contractors from abroad to operate some of its facilities in defiance of the indefinite strike called by the Kuwait oil workers union over planned wage cuts.

The stoppage in the OPEC oil cartel's fourth largest producer has helped world prices to recover after a sharp fall on Monday following the failure of major producers to reach agreement on a proposed output freeze.

At around 0700 GMT on Tuesday, US benchmark West Texas Intermediate for May delivery was up 35 cents at $40.13 a barrel, while Brent crude for June rose 34 cents to $43.25.

Besides the fall in Kuwait's crude production, refining also dropped from 930,000 bpd to 520,000 bpd and natural gas output dropped to 620 million cubic feet (17.6 million cubic metres) from 1.3 billion cubic feet (36.8 million cubic metres).

Sheikh Khaled said the strike had not affected exports or domestic supplies as the emirate was using its strategic storage.

Late on Monday, acting oil minister Anas al-Saleh again appealed to striking workers to return to work and pledged that their wages will not be cut.

The workers have said they will not end their action until the government scraps plans to cut their benefits and incentives under a new payroll scheme, and privatise parts of the oil sector.

KPC said on Sunday that reserves of petrol and derivatives were sufficient to meet domestic demand for 25 days and that strategic reserves could cover a further 31 days.