MercoPress. South Atlantic News Agency

Petrobras strike: “contingency plan” guarantees supply

Production reduction was only 136.000 bpd.

Brazilian government managed oil and gas corporation Petrobras reacting to a labor strike which began early Monday announced that all but two out of 38 offshore platforms are extracting hydrocarbons.

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. The company said the reduction was only 136.000 bpd. 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 Jose 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 Brazil's Agencia Nacional do Petroleo, 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.