Brazil Petrobras Scandal: Oil Output Dips At Offshore Platform As 24-Hour Strike Takes Toll

A 24-hour strike at Brazil’s state-run energy giant Petrobras has hampered production at one of the company’s 19 offshore oil-and-gas platforms. Output stopped Friday at a platform near Rio de Janeiro after workers refused to pick up their tools, Reuters reported.

Petrobras employees were protesting plans by the oil and gas company to slash investment and liquidate assets to cut its debt. Around 90 percent of the company’s 86,000 workers participated, the National Oil Workers Federation told local media.

The energy firm in late June reported plans to divest itself of assets totaling $15.1 billion in 2015 and 2016. Petrobras said it expected additional restructuring and divestments, and the demobilization of assets totaling $42.6 billion during 2017 and 2018, Oil & Gas Journal noted.

Shares of Petroleo Brasileiro Petrobras SA (NYSE:PBR) tumbled slightly by 3.7 percent Friday to $6.66 a share.

The Brazilian giant in the last year has been slammed by both the plunge in global oil prices and a devastating corruption scandal. Dozens of former Petrobras executives are accused of colluding with construction companies to inflate government contracts with kickbacks paid to members of the ruling Working Party. The scandal has eroded public trust in the company and caused Brazilian President Dilma Rousseff’s approval ratings to plummet.

The president’s approval ratings fell into the single digits in July, a Tuesday survey found. Just 7.7 percent of respondents rated Rousseff’s performance as “great” or “good,” while nearly 71 percent rated her “bad or terrible,” Brazilian polling firm MDA said.

Petrobras, one of the world’s most heavily indebted oil companies, last month cut forecasts for domestic production to 2.8 million barrels per day of oil equivalent by 2020 -- down from a previous target of 4.2 million barrels per day. The company’s share price has dropped 26 percent over the past year in the wake of low oil prices, corruption concerns and cost overruns.

The output cut on Friday will have a negligible effect on Petrobras’ overall production. The P-15 offshore production platform accounted for one-tenth of 1 percent of Petrobras’ total Brazilian output in May, Reuters said.