Petrobras: Brazil Oil Strike Cuts Output Up to 13%


RIO DE JANEIRO/SAO PAULO, Nov 3 (Reuters) - A labor strike that began on Sunday has reduced oil production from Brazil's state-run oil producer Petroleo Brasileiro SA by 273,000 barrels on Monday, or 13 percent of its output, the company said in a Tuesday security filing.

Petrobras said it estimated oil production would show a 8.5 percent drop on Tuesday and natural gas output would fall by 13 percent compared with the production level of the day before the strike began. It said fuel distribution has not been affected by the stoppage and does not expect supply shortages in Brazil.

The country's largest oil workers union FUP said earlier that the strike slowed daily oil output by around 25 percent.

FUP's general coordinator Jose Maria Rangel said in a video published online that in the first 24 hours since the union's members joined the strike, they had prevented around 450,000 barrels of oil from being extracted in the offshore Campos Basin, and nationwide around 500,000 barrels.

Petrobras, as the company is known, produced around 2 million barrels of oil per day in September.

News of the strike in the ninth biggest global producer helped push oil prices above $50 per barrel on Tuesday. The production hit comes as Petrobras is particularly strapped for cash, amid the country's largest-ever corruption scandal and low oil prices.

The lost oil production could cost Petrobras some $25 million per day in foregone revenue, analysts said.

"It's at least that," said David Zylbersztajn, director of local consultancy DZ Negocios com Energia.

Brazil's ANP oil agency said in a statement there was no risk of oil shortages at the moment due to the strike.

Petrobras said in a statement late on Monday it had deployed contingency teams in some units. The company said it was taking all necessary measures to continue supplying the market.

FUP, which represents platform, refinery and other workers, on Sunday afternoon joined a number of smaller unions already in an open-ended strike. The unions are protesting attempts by the government to shrink Petrobras, which is struggling with heavy debts, a corruption crisis and falling oil prices.

Forty-four different production units are participating in the strike in the offshore Campos Basin, unions said. They said workers at refineries in Sao Paulo and Bahia were also participating.

(Additonal reporting by Anthony Boadle; Writing by Caroline Stauffer; Editing by Chizu Nomiyama, Meredith Mazzilli and Bernard Orr)

Copyright 2016 Thomson Reuters. Click for Restrictions.


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MrLatinMarkets | Nov. 4, 2015
I think (whoever wrote the article) is missing the big picture and if not corrected will miss the rally it will come. Prices are at distress values. Looked what happened in Argentina 2001 and 2002. It is the same as what is happening in Brasil now. And the stock market rally in Argentina the following years was FANTASTIC. Dont miss the boat. To do this market you must hear the locals, not just the headlines! PBR price is at distress value, although I would prefer its debt. Brasil has 370Bn in reserves!!!! and cannot yield above argentina who just has 22Bn in USD reserves. Steel Companies in Brasil are at distress prices. Hope this helps. Enjoy, and do your DD!

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