OREANDA-NEWS.  An indefinite labor strike across much of Brazil's oil sector entered its third day with more than a fifth of state-controlled Petrobras crude production shut in, the federation of oil workers FUP said.

In a statement issued this evening, Petrobras said the strike cost the company around 273,000 b/d of oil production yesterday, a 13pc decrease compared with daily output before the strike started. Domestic oil production dropped by an additional 8.5pc at the end of today, the company said.

Based on pre-strike oil production of around 2mn b/d, the company appears to have lost some 420,0000 b/d, close to the figure issued by the FUP earlier today.

Natural gas production for 2 November was reduced by 7.3mn m3/d (257.7mn ft3/d) compared with pre-strike levels, a 14pc decrease, and took another 13pc hit today, Petrobras said.

"With the loss of production, collection of taxes collected on behalf of the federal government, states and municipalities, such as royalties and special participation, is directly impacted. Petrobras is taking the necessary measures to ensure the maintenance of its activities, preserving its facilities and the safety of its workers," the company said.

Despite the loss in output, supply to the market is still functioning normally and no fuel shortage is foreseen, the company said.

The FUP says 44 offshore platforms in the Campos basin now adhering to the strike, up from an initial 21.

The labor federation estimates 450,000 b/d, or around 22pc of the 2.06mn b/d that Petrobras produced in Brazil in September, has been lost as a result of the strike.

Some of the Campos basin's top-producing platforms have been affected, including 141,000 b/d P-52 and 81,000 b/d P-55 in the giant Roncador field, 77,000 b/d P-53 in the Marlim Leste field, and 61,000 b/d P-50 in the Albacore Leste field.

According to the FUP, 27 of the 44 affected platforms are shut down, eight are partially operating, and the remaining nine are operating in the hands of strikebreakers contracted by Petrobras.

Petrobras says there are a total of 49 platforms in Campos, which accounts for around 70pc of its production. The Santos basin, where most big foreign companies operate, has apparently not been directly affected by the strike.

Foreign companies that operate in Brazil, such as the UK?s BG, Norway?s Statoil and US firm Chevron, have not commented on the labor action or its impact on their operations.

Oil workers are seeking wage hikes and a halt to Petrobras' plans to sell assets.

The heavily indebted company aims to generate around $58bn in asset sales and corporate restructurings through 2018. Union leaders say the plan will result in massive layoffs.

Workers at Petrobras? 13 domestic refineries are also participating in the strike, but Brazilian labor law requires that a minimum number of workers maintain activity in high risk operations, including refineries, during strikes.

Brazilian oil regulator ANP said at the moment there is no risk of a fuel supply shortage in Brazil, but should the situation arise the agency will take appropriate measures.

Petrobras' Fafen-PR nitrogen fertilizer plant in the southern state of Parana is also completely shut down, the Sindipetro-PR/SC union said.

Labor leaders say the ongoing work action could be a repeat of a crippling 32-day strike in 1995.

The strike will be an important test for the new management of Petrobras, which has touted its independence from the governing Workers Party (PT). With president Dilma Rousseff's approval rating in the single digits, she could force the company to give in to the strikers? wage hike demand in an effort to maintain support from labor unions, one of the few groups that has not cut ties with the embattled government.

The impasse between union leaders and Petrobras management deepened overnight after influential union representative and Petrobras board director Deyvid Bacelar was temporarily detained by police while organizing striking workers at the 323,000 b/d S?o Francisco do Conde refinery (RLAM) in the northeastern state of Bahia.

The arrest was an arbitrary and an abuse of power, the union says.