While Workers Go on Strike Brazil’s Petrobras Strikes Oil Again

Brazilian Petrobras In response to a labor strike which started early Monday, July 14, Brazilian state-controlled oil multinational Petrobras announced that all but two out of 38 offshore platforms are operating. Company officials and labor leaders had different number for the strike effect on oil extraction.

In an official release Petrobras said that the labor dispute is limited to production activities in the Campos basin. but the company has activated a Contingency Plan, guaranteeing "operational continuity, operation security, and market supply."

Furthermore of a "total of 38 production platforms in the Campos Basin, only two are fully paralyzed and at noon Monday, total reduction was 136,000 barrels/day (approximately 7% of the production in Brazil), and fuel supply to the consumer has not been affected."

Petrobras added that drilling rigs are operating normally following a Saturday injunction from a Rio do Janeiro regional labor court stipulating "that facilities cannot be occupied, that the workers who are on strike must disembark, and that those who want to work be granted access to the facilities."

The union representing 4,500 workers in the Campos Basin, source of more than 80% of Brazil's oil output, started a five-day strike at zero hour Monday to press for an extra day of pay for each two weeks worked offshore.

Offshore crews, who work 14-day shifts at sea and are off for 21 days, are asking Petrobras to pay them for a 15th day because they must wake up and do regular tasks on the morning after their shifts end until they are relieved by other workers. Travel times of up to 40 minutes by helicopter to shore also limit free time available to employees, some of whom live thousands of kilometers away, argue union leaders.

At mid morning Monday the union said oil output was cut by as much as 400,000 barrels of oil a day. Union leaders say they expect production at more than 30 of the region's 42 oil platforms to eventually come to a near standstill.

Concerns about the strike at one point on Monday pushed the price of crude oil to more than US$ 146 a barrel in New York trading. Oil prices hit a record high Friday of $147.27 a barrel in New York.

Petrobras, the world's sixth-largest company by market value, is trying to contain costs as producers compete for equipment and labor amid record oil prices, driving up rates for drilling rigs, production platforms and technical services.

Brazil produced 1.56 million barrels of oil a day in the Campos Basin in June. Brazil, the fifth-largest oil producer in the Americas, became a net exporter of petroleum for the first time last year. Petrobras Chief Executive Officer José Gabrielli plans to increase production 80% by 2015 to the equivalent of 4.2 million barrels of crude a day, largely on the strength of so-called pre-salt fields off Brazil's coast.

Brazil exported more than 680,000 bpd in May, 38% more than it imported, according to Brazil's Agência Nacional do Petróleo, ANP, the nation's oil regulator.

In related news, Petrobras informed ANP on Monday that it has made a discovery of good quality oil (27º API) in the Espí­rito Santo Basin. The discovery follows the drilling of well 4-GLF-23-ESS, located in the area of the Golfinho field, 60 kilometers away from the city of Vitória, at a depth of 1,374 meters from the waterline.

First estimates indicate a potential of 150 million barrels of recoverable oil. The concession is wholly owned by Petrobras and given its closeness to the Golfinho field they could be extracted in a relatively short period of time.

Mercopress

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