Amid being the center of a major, worldwide bribery and corruption scandal, Brazil state-run oil company Petróleo Brasileiro’s (Petrobras) operations are being affected by the oil workers’ unions strike, and at the same time, the company received the resignation of one of its board members.
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Image from FUP. |
As of 2 November, Petrobras confirmed that oil production fell by 273,000 bbl, which is equivalent to 13% of daily output in Brazil due to the strike.
“There was also a shortfall of 7.3 MMcm of natural gas, corresponding to 14% of the volume supplied to the Brazilian market every day,” Petrobras said in a statement.
The Brazilian giant estimated that by the end of the day on 3 November, the country’s oil output would have fallen by 8.5% and gas availability by 13% over pre-strike levels.
“Petrobras reiterates that, despite the impact of the strike on the country’s oil and gas output, distribution is functioning normally and there are no market shortages,” the company said.
However, according to the Federação Única dos Petroleiros (FUP) or Oil Workers Union, Petrobras is underestimating the strike, the impact of downtime, and reduced operating units in several states.
“The company [Petrobras] still refuses to discuss with the workers alternative measures to its business and management plan, which provides for cuts of investments of over US$132 billion (R $ 500 billion) and sales of assets of more than $ 200 billion,” FUP said in a statement.
Petrobras also said that due to production loss, the strike is directly impacting the collection of taxes on behalf of the Brazilian federal government, states and municipalities, such as royalties and special participation.
"These measures, yes, affect, and the economy at the federal, state and municipal levels, because for every $1 billion that Petrobras fails to invest in the country, the negative effect on GDP is $2.5 billion. If the cuts announced by the company continue, it is estimated that 20 million jobs will no longer be generated by 2019. This year alone, 15,000 steelworkers were laid off, thousands of outsourced tankers contracted by Petrobras lost their jobs and more than 30,000 jobs are threatened in the petrochemical sector," FUP said.
The strike began on Sunday, 1 November.
In addition to the oil strike, Petrobras board member and chairman of Petrobras Distribuidora Clovis Torres Junior announced his resignation from both positions on 3 November, citing personal reasons.
Torres Junior was the alternate of Murilo Pinto de Oliveira Ferreira in the company’s board of directors, and was already in leave of absence since 14 September.
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