Brazil Officials Prevent Petrobras from Restarting Offshore Platform

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June 8, 2011

RIO DE JANEIRO— (Dow Jones & Company) Brazilian labor officials prohibited Petroleo Brasileiro SA, or Petrobras, from restarting operations at a troubled offshore platform until safety issues are addressed, as the state-run energy giant remains under scrutiny for its work practices.

The local labor court, which conducted a safety inspection of the platform last week, submitted Petrobras with an “notice of interdiction” for the P-65 platform, which processes oil at the Enchova field, Petrobras said in a filing Wednesday.

The platform has been closed since May 23 for maintenance work, with many of the safety concerns presented by labor officials already being addressed, the company said.

Petrobras also said it suffered a small spill of “oily water” at the PCE-1 platform also at the Enchova field. “The leak of 24 liters [6.3 gallons] of oily water happened in the tubes connecting the platform to an oil pipeline from the Bicudo field,” Petrobras said.

The spill was immediately contained and the area cleaned, Petrobras said. The incidents didn’t affect oil production, the company said.

The latest incidents serve to heighten scrutiny of the federal oil company, which has come under criticism from oil trade unions for safety hazards and shoddy maintenance work at some of Petrobras’ aging platforms. The complaints have emerged while the global oil industry faces continued fallout from last year’s massive oil spill in the U.S. Gulf of Mexico.

“Petrobras will adopt all of the demands made by [labor officials], and reaffirms that its platforms operate within the most rigorous security norms in the oil industry,” Petrobras said.

The P-65, which is an offshore oil-treatment facility and doesn’t produce crude, was the latest platform to draw fire after the Sindipetro union said last week that a series of safety hazards were found. The P-65 platform operates at the Enchova field in the Campos Basin, where more than 85% of Brazil’s crude oil is produced.

The union said it had sent a list of possible problems with the P-65 and other Petrobras platforms to Labor Minister Carlos Lupi in March.

The union has paid closer attention to possible rig problems since the accident with Petrobras’ P-36 rig, which sank in 2001, killing 11 workers. Last year, output was temporarily halted at Petrobras’ P-35, P-33, P-27 and P-50 rigs for safety and maintenance reasons, according to the union.

-By Jeff Fick, Dow Jones & Company


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