Petrobras, union in talks as strike drags on
OREANDA-NEWS. November 11, 2015. Brazil's state-controlled Petrobras will meet tomorrow morning with union leaders in an effort to end the country?s longest strike by oil workers in two decades.
Petrobras has diminished offshore production losses since the strike began on 1 November, but there remain fundamental differences with the federation of oil workers, FUP.
The first five days of the work action cost Petrobras an accumulated 827,000 bl of crude, according to the company?s estimates.
The total is roughly equivalent to one day of production from Brazil's massive sub-salt fields in the Campos and Santos basins.
Contingency teams brought in to run offshore platforms operated by Petrobras have reduced daily losses. The daily impact of the strike averaged around 165,000 b/d on 2-6 November. Petrobras said it lost 115,000 bl on 6 November as a result of the strike, down from 127,000 bl on 5 November. Lost output was 134,000 bl on 4 November, 178,000 bl on 3 November, and 273,000 bl, or 13pc of pre-strike output, on 2 November, the first full day of the strike.
Petrobras said it did not have estimates for production lost over the weekend.
The company?s figures on lost output are significantly lower than the 400,000 b/d now estimated by the FUP. The labor group says Petrobras is deliberately underestimating the impact and is engaging in illegal practices in an attempt to break the strike.
But it conceded that the strike has lost some traction. In an update issued today, the FUP says 26 of 49 participating platforms in the Campos basin have stopped production, down from 30 that it said were idled on 5 November. According to Petrobras data, there are a total of 49 platforms in Campos, which accounts for most of Brazil?s oil production.
Sindipetro-NF, the Rio de Janeiro state-based union that is part of the FUP, has complained to oil regulator ANP that Petrobras is fraudulently reporting lost production and installing unqualified contingency teams.
The ANP has not provided an estimate of lost production, but says there is no immediate risk of a fuel supply shortage.
The strike has spread to offshore platforms beyond Campos, including 104,424 b/d P-58 and 74,833 b/d P-57 in Espirito Santo basin, but it does not appear to be denting sub-salt oil production in the Santos basin.
One foreign company that has been affected by the strike is Chevron, Petrobras? partner on the Campos basin Papa-Terra field which was shut in on 2 November.
The UK?s BG has deferred to Petrobras as the operator on its producing assets. European firms Shell and Statoil say their operations have not been affected by the strike.
The Sao Paulo state-based Sindipetro-LP union, which represents workers on some Santos basin platforms, said its members had handed control over the mainly gas-producing Mexilh?o platform to contingency teams on 4 November. The field, wholly owned by Petrobras, was the second-largest gas producing field in September with 8.4mn m3/d (297mn ft?/d) of output.
Petrobras said the platform was shut down on 1 November as part of scheduled maintenance and should resume production within a week.
Downstream, the FUP says workers at 11 of Petrobras' 13 domestic refineries are participating in the work action. Various units are reported to be operating below capacity as a result of the strike, but Petrobras has declined to comment on the impact the strike has had in the downstream segment.
Sindipetro-LP says output at the 178,000 b/d Cubat?o refinery (RPBC) has halved crude processing after workers joined the strike on 5 November.
Brazilian labor law requires that skeleton crews maintain sensitive operations, including refineries, during strikes. Petrobras says it is taking "appropriate legal measures to ensure the maintenance of its operations" and there is currently no risk of a fuel supply shortage.
The main focus of the strike is Petrobras' plan to raise more than \\$58bn in asset sales and corporate restructurings through 2018. The divestment plan is seen as an unavoidable step for Petrobras to manage more than \\$130bn in debt.
The strike poses another challenge for embattled Brazilian president Dilma Rousseff, who continues to fend off calls for her removal as a massive corruption scandal centered on Petrobras climbs to the country's political and business elite.
Labor unions, long allied with the ruling Workers Party (PT), have seen their members' spending power eroded by inflation, which climbed to near 10pc year-on-year in October. A government austerity plan has sparked fierce labor opposition as well.
The ongoing strike is the longest since a 32-day labor action in 1995.