Brazil’s daily oil production has fallen by about 500,000 barrels as oil workers strike for the third day to protest austerity measures by state-controlled Petroleo Brasileiro SA that are resulting in job losses, the country’s main oil union said Tuesday.
Output from the Campos Basin is down about 400,000 barrels a day with 25 offshore platforms completely shut and another 8 units pumping at reduced levels, Francisco Jose de Oliveira, head of communications for the FUP oil union, said in a telephone interview from Rio de Janeiro. Production has declined at other regions, including Espirito Santo and Bahia, Oliveira said, adding that the union doesn’t have any immediate plans to meet with Petrobras management.
Petrobras estimates the strike is reducing daily oil production by 8.5 percent and natural gas output by 13 percent, while it expects no disruption to its distribution network, according to a regulatory filing.
The strike is the latest in a series of setbacks for the Brazilian producer, which had its debt downgraded to non- investment grade in September as it tries to deal with a collapse in commodity prices and a widening graft scandal that has resulted in some of its suppliers seeking bankruptcy protection. The company is slashing investments and selling assets to reduce the biggest debt load in the oil industry.
“There’s no reason to think this strike will end quickly,” said Bernardo Wjuniski, a Sao Paulo-based research analyst at Medley Global Advisors. “The big issue is to reverse the change of course at the company, which isn’t going to happen.”
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