Tuesday, December 10, 2013

Brazil union plans Petrobras refinery strike after fire

A Brazilian oil union said Monday that it plans to go on strike to protest allegedly unsafe conditions at state-run oil company Petroleo Brasileiro SA's REPAR Refinery, the site of a Nov. 28 fire that shut more than 10 percent of Brazil's fuel output.

Meanwhile, a Brazilian energy consultancy familiar with the refinery's output said the shutdown at the facility, if it lasts through the end of the year, could cost Petrobras as much as 1.3 billion reais ($560 million) because of additional fuel imports needed to make up for lost production.
The estimate, by the Rio de Janeiro-based Brazilian Infrastructure center, calculates the cost of gasoline and diesel that Petrobras will have to buy abroad in order to meet demand for the fuels normally produced by the refinery. Combined, the imports would total 70 percent of the gasoline and diesel that Petrobras imports each month.
Officials at Petrobras' press office in Rio de Janeiro did not respond to requests for comment on the potential losses or the prospect of a strike at the facility, in the southern state of Santa Catarina. The company is the only oil refiner in Brazil, a country of 200 million people and the world's seventh-largest economy.
Late last week, a source told Reuters that Petrobras plans to restart the refinery on Dec. 18, with full operations following about five days later.
But the head of the Sindipetro labor union in Santa Catarina said workers would strike because they considered the timeline to be unsafe.
"Petrobras is working with a very daring schedule," said Silvaney Bernardi, the union president, in a telephone interview. "We don't think they can meet that schedule and meet it safely."
UNION DEMANDS
In a statement Monday, the union said it would begin striking at 0:00 hours (0200 GMT) on Thursday unless Petrobras satisfied its concerns. Among its demands, the union wants Petrobras to hire more workers and follow agreed upon safety and operational procedures upon restarting the facility.
By its calculations, the union says at least a month would be needed for the adequate cleanup and repair efforts to be completed. "We feel the repairs should take about 30 days and that's pushing it," Bernardi said.
The accident that shut REPAR was caused by a pipe leak near the furnace at the atmospheric distillation unit.
The 190,000 barrel-a-day REPAR refinery supplies 100 percent of fuel in Parana and Santa Catalina states, two of Brazil's wealthiest, and also parts of São Paulo and Mato Grosso do Sul.
Any costs from imported fuel necessary to make up for lost production at the refinery will add to increasing financial pressure on Petrobras at a time when domestic fuel demand outstrips capacity at its 13 Brazilian refineries. The pressure is compounded by government fuel-pricing policies that force the company to sell imports at a loss.

The pricing policy is largely responsible for 30 billion reais ($12.7 billion) in refining-and-supply unit losses at Petrobras since the beginning of 2012.

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