MercoPress. South Atlantic News Agency

Argentine province reviewing BP operating licence in main oil field

Strikers calling themselves ‘dragons’ occupied the premises and destroyed company’s property

Argentina’s Chubut province is reviewing the operating license of BP Plc main oil field in the country and may revoke it, the provincial oil minister said. The review started after operations were interrupted last month for over three weeks during a workers’ protest, Minister Ezequiel Cufre said in an interview in Buenos Aires.

BP owns the Cerro Dragón concession in Argentine Patagonia through its 60% stake in Pan American Energy LLC.

An estimated 54% of the oil field’s output was restored as of June 30 following a strike by construction workers who sought the same pay as oil workers. Pan American has said it may fire construction workers who went on strike for almost three weeks and damaged company property.

“If the company continues in its attempt to fire 173 employees and acts with intransigence, we will retaliate with the same intransigence” Cufre warned.

“Firing that many workers could represent a breach of contract terms and the license could be revoked; no one should be fired until declared guilty by a court following a valid process, nor should the contracts be terminated” said Cufre.

Earlier in the week Chubut Governor Martin Buzzi, an ally of President Cristina Fernandez, pointed a finger at Pan American for the unrest. “Everything that happens on the inside is the responsibility of the operator,” Buzzi told reporters. “We will be watching Pan American's conduct as a company.”

The remaining 40% stake in Pan American is owned by Bridas, a joint venture comprised of China’s Cnooc Ltd and Argentina’s Bulgheroni brothers.

Cerro Dragon produces about 100,000 barrels of crude per day, or roughly 15% of total output of Argentina.