Brazil oil strike shuts in 2mn bl: unions

OREANDA-NEWS. November 12, 2015. An ongoing strike by Brazilian oil workers has squandered an accumulated 2mn bl of offshore crude production, according to the FUP, a federation of oil unions.

The estimate, equivalent to an average of 200,000 b/d or around a tenth of Brazil?s normal output since the strike began on 1 November, is nearly double the estimate of total lost production issued by state-controlled Petrobras.

In its latest estimate issued yesterday, Petrobras said accumulated lost production was around 1.17mn bl through 9 November. Contingency teams brought in by the company have cut daily losses from 237,000 bl on 2 November to 115,000 bl since 6 November.

The FUP says Petrobras is deliberately underestimating the strike?s impact. It estimates the financial loss from reduced production is around R400mn (\\$106mn), or \\$10mn per day.

The work action is mainly concentrated in the offshore Campos basin, where the FUP now says 50 platforms are participating, but production in other areas has also been affected.

According to the FUP, onshore oil production in the northeastern state of Bahia has been reduced from 4,500 b/d to 2,100 b/d. The strike has also impacted power generation at the Muricy thermal power plant in Cama?ari, where generation has fallen from 326MW to 118MW, and halted biodiesel production at the Candeias plant, also in Bahia.

The financial loss excludes reduced output at Petrobras' 13 domestic refineries, of which at least 11 are participating in the strike, according to the FUP.

The labor group says crude processing at the 239,000 b/d Campos El?seos (Reduc) refinery in Rio de Janeiro state has been reduced by 30,000 b/d, and petroleum coke output has been cut by 80pc.

Processing at the 53,000 b/d Capuava (Recap) refinery in Sao Paulo state has been reduced by almost 50pc, the FUP estimates, adding that other Petrobras refineries have also been impacted.

Petrobras declined to comment on the status of its downstream segment.

The Brazilian oil regulator ANP that manages daily production data, the basis of royalty payments, was not immediately available to comment. The agency has previously said there is no immediate risk of a fuel shortage, but it would take necessary measures should the situation arise.

Yesterday, union leaders and Petrobras management failed to reach an agreement to end the strike during a first round of negotiations. A second meeting planned for this morning has been pushed to later today, FUP said.

The work action, the worst to hit the oil sector since a 32-day strike in 1995, has increased pressure on president Dilma Rousseff, who is fending off calls for her ouster over separate controversies surrounding illegal campaign financing, financial mismanagement and corruption.

A simultaneous truckers strike across Brazil has created transportation bottlenecks.