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Brazil oil workers start strike, halting most output


Brazil oil workers start strike, halting most output

Mon Jul 14, 2008 1:37am EDT
By Peter Murphy


SAO PAULO (Reuters) – Oil workers at Petrobras (PETR4.SA: QuoteProfile,ResearchStock Buzz) (PBR.N: Quote,ProfileResearchStock Buzz), Brazil’s national energy giant, halted extraction at most of the country’s main fields in the Campos basin at the outset of a planned five-day strike, a union official said on Monday.

Campos accounts for more than 80 percent of Brazil’s crude output of 1.8 million barrels per day, or around 2 percent of world supply. Worries about the strike helped push up world oil prices CLc1 last week to a new record on Friday above $147.

“Of the 42 platforms, 33 are now stopped,” said Jose Genivaldo Silva, director of the United Oil Workers’ Federation (FUP), an umbrella union, almost one hour into the stoppage.

Petrobras had said it would implement a contingency plan to maintain production on the platforms but Silva said workers would resist any such attempts. The firm has so far declined to comment on the stoppage.

Brazil is self-sufficient in oil and little of its production is exported, meaning the stoppage is likely to have little impact on foreign importers.

Petrobras said in May that first quarter net imports of oil and products totaled 7,000 bpd, while a year ago it had net exports of 187,000 bpd. It expects to end this year with net exports, making it the third year of the country’s self-sufficiency in oil.

Brazil’s oil sector was opened to competition in 1997, but Petrobras is still the dominant player.

Royal Dutch Shell, Repsol-YPF and Devon Energy Corp are already pumping crude in Brazil. Chevron will join them with an off-shore field that should start pumping next year and two more in 2010 and 2012. Dozens of other companies are looking for oil in Latin America’s largest country.

The Campos union is pushing Petrobras to count the day workers leave the platform for the shore as a working day.

In the hours before the strike began Silva said workers may wait anything up to 10 hours for a 40-minute helicopter ride back to land after their shift finishes, eating into their away time.

He said workers would remain on all of the 42 Campos platforms once the strike begins, and would continue pumping a very small quantity of oil at each site for technical reasons, to avoid jeopardizing production once the stoppage ends.

“You can’t stop production. You have to reduce it otherwise you lose the well shaft,” he said before the strike got underway.

The umbrella union will hold a meeting on Tuesday to discuss the possibility of a five-day nationwide strike at all Petrobras facilities including refineries and terminals, to demand a bigger share of company profits for workers.

A five-day nationwide strike of Petrobras workers in 2001 seriously reduced output and forced Brazil to import additional oil. Unions and the company have resolved their differences over the past few years without stoppages hurting production.

(Editing by Michael Urquhart)


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