Worst Petrobras strike in 20 years endangers debt plan
By Jeb Blount
RIO DE JANEIRO Nov 4 (Reuters) - A four-day strike against Petrobras gathered steam on Wednesday, cutting crude and natural gas output from the No. 2 South American oil producer and threatening to become the most disruptive walkout at the state-run oil company in 20 years.
Petroleo Brasileiro SA, as Petrobras is formally known, is expected to continue to report significant output cuts after new offshore units were affected by the strike, which began on Sunday.
On Monday Petrobras said it had lost 273,000 barrels a day of crude output, or about 13 percent of its Brazilian output. It has made no formal estimate for output since then.
The cuts have already caused the biggest strike-induced hit to Petrobras' crude output since a 32-day strike in 1995 that led to lines at gas stations and military occupation of refineries. The latest strike is also likely to increase pressure on a company hobbled by a vast corruption scandal and struggling under $130 billion of debt, the largest in the world oil industry.
"This is serious because it is happening in the midst of Brazil's worst economic crisis in decades and in the middle of Petrobras' worst crisis ever," said Adriano Pires, head of the Brazilian Infrastructure Institute, a Rio de Janeiro Energy research company.
"It's like the unions are saying, 'Hey, Petrobras is in intensive care. Let's pull the plug!'" he added.
Petrobras management has said in the past that it can normally maintain operations with no impact to fuel supplies in Brazil for a week or 10 days at the most.
Workers seek to block planned asset sales, reverse budget cuts and protect Petrobras' right to lead the bulk of new offshore oil development. Petrobras has offered an 8.1 percent salary increase, but wages are not the key issue, union representatives say. Continuación...