40,000 Petrobras Employees Strike over Upcoming Libra Oilfield Auction

Having made the largest discovery of oil in decades, Brazil is trying to attract foreign investors to help its state-owned oil company, Petrobras, develop the giant reserves.

On Monday the government will hold an auction to sell off exploration rights in the Santos deepwater basin, around 140 miles off the coast of Rio de Janeiro.

Oil production across the country has this week been disrupted due to a strike by as much as 90% of Petrobras' employees in protest against the planned auction.

Operations at forty two drilling platforms and several refineries have been interrupted since Thursday, as employees strike over fears that the selling of licences to foreign firms will damage national interests, as the people of Brazil will not receive the benefit of the full profits from the oil.

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The strike is just a short-term solution whilst the nation's unions take legal action to try and halt the auction.

José Antonio de Moraes, the president of the Unified Federation of Oil Workers, explained that their "aim is not to hurt the population, but we will carry on with the strike for an indefinite period, until our demands are met."

BBC News reports that the 40,000 Petrobras employees that took part in the strikes are also demanding a pay rise, and changes to plans that will hand out service contracts to private companies, rather than to Petrobras.

Petrobras released a statement saying that it had taken "all the measures needed to guarantee operations and the supply of products to the market."

The strikes took place outside Petrobras' headquarters in Rio de Janeiro, and surrounding government buildings in the capital of Brasilia.

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Edison Lobao, the Mines and Energy Minister, confirmed that the auction will still take place as planned on Monday, it is expected that six foreign companies will take place in the auction: China National Petroleum Corporation, Shell, Ecopetrol, Total, China National Offshore Oil Corporation, and a consortium made up of Repsol and Sinopec.

The auction will sell off plots in the Libra deepwater oil field, which the government has estimated, "the volume of recoverable oil belonging to the nation could vary from 3.7 billion to 15 billion barrels, with the most likely estimate being 7.9 billion barrels."

Magda Chambriard, the president of the National Petroleum Agency (the owner of the oil field), commented that she expects Libra to produce 1.4 million barrels of oil a day within a decade.

By. Joao Peixe of Oilprice.com