Brazil strike not impacting oil production: Shell

OREANDA-NEWS. November 06, 2015. An indefinite strike by oil workers in Brazil has not impacted Shell?s Campos basin operations, the major said today.

"Shell's production has not been impacted by the strike," Shell Brazil said.

The strike has disrupted up to a fifth of Brazilian state-controlled Petrobras? production, according to estimates by the labor federation FUP.

Shell holds an 80pc operating stake in the Bijupir? and Salema deepwater fields in the Campos basin, where the ongoing strike is focused. Petrobras holds a 20pc stake in the fields.

The fields produce a total of around 22,000 b/d of 28-31°API crude through the floating production, storage and offloading (FPSO) unit Fluminese. The unit is not one of the 47 platforms currently adhering to the strike, according to details of the labor action issued by the FUP yesterday.

Brazilian independent PetroRio, formerly known as HRT, is in the process of acquiring Bijupir? and Salema from Shell and Petrobras. The transactions are pending the approval of Brazilian oil regulator ANP.

Elsewhere off Brazil, Shell currently produces around 55,000 b/d through the FPSO Espirito Santo, at the deepwater Ostra, Abalone and Argonauta fields in the BC-10 block of the Campos basin.

Shell holds a 50pc operating stake in BC-10. Indian state-controlled ONGC Videsh holds 23pc and Qatar's state-owned QP holds the remaining 27pc.

The exact impact of the strike that started on 1 November is unclear following a series of contradictory statements issued over the last two days.

The FUP pegs the loss resulting from interruptions at offshore platforms at around 450,000 b/d. Petrobras said late yesterday the first full day of strike action on 2 November resulted in a loss of 273,000 bl of oil, or 13pc of pre-strike production. The company was less clear on the output loss on the second day, which it said declined by 8.5pc without specifying whether the effect was cumulative.

The unions have said Petrobras has brought in contingency teams to operate some of the platforms participating in the strike.

In a fresh statement today, the FUP said Petrobras is deliberately hiding the strike?s impact on production and warned of possible accidents.

"In a statement issued Monday night, Petrobras, once again, lied to workers and to Brazilian society. The company admits the FUP strike affected production, but underestimates the impact of downtime and reducing the activities of operating units in several states….The FUP and their unions condemn the possibility of major accidents as a result of the contingency teams that Petrobras is illegally installing to operate the units in an attempt to resume production at all costs."

Other foreign firms with production operations in the Campos basin, such as the UK?s BG, US major Chevron and Norway's Statoil, have not commented on the impact of the strike.

Although downstream operations are subject to the strike as well, Petrobras has said fuel supply has not been affected. Brazilian labor legislation requires high-risk operations such as refineries to remain in service during labor actions.