Speaking to reporters on the sidelines of a meeting of ministers from the Southern Cone Common Market or Mercosur, presidential aid Luiz Dulci said Petrobras and striking workers could reach an agreement "in the next few days."

He also said the strike, which yesterday added concerns of further price hikes on the international market, poses no risk of fuel shortages.

Meanwhile, state-run oil company Petrobras says production at the rigs off the coast of Rio de Janeiro state is back to normal thanks to a contingency plan set in motion as soon as the strike began, said the Associated Press.

"Output at the Campos basin is totally normalised. Contingency workers - supervisors and team coordinators - managed to get production back to normal," Petrobras spokesman Celso Mansur said

By the end of the strike's first day, production stood at 98% of capacity and output was reduced by 63,000 barrels, Mansur said.

He said that only four of the 42 rigs in the Campos basin, had come to a standstill yesterday.

The Sindipetro-NF union said in a statement that workers on 33 rigs had walked off their jobs, but did not provide figures on how much oil was being pumped by the contingency workers.

Oil workers began their five-day strike to pressure Petrobras to give them an extra day off at the end of each two-week shift on the platforms.

Union spokeswoman Fernanda Vissen said a new round of negotiations would probably take place on Wednesday.

Meanwhile, the National Oil Workers Federation is threatening a wider strike to demand a greater share of Petrobras' profits. The unions say that the company's profits have more than doubled since 2002 but that pay has not kept pace.

Jose Genivaldo da Silva, one of the federation's directors last week said workers wanted 25% of the dividends paid to shareholders, but that Petrobras has only offered 12.8%.

Published: 15 July 2008 17:50 GMT  | Last updated: 15 July 2008 17:50 GMT