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Brazil – Petrobras Brazil Offshore Explosion Kills 5, 10 Missing

petrobras-oil-rig-001At least 5 workers were killed and 17 injured on Wednesday by an explosion on an offshore oil and gas platform operated by state-run Petrobras, a disaster that could further hurt the reputation of a company struggling with a corruption scandal and safety concerns.

With six workers still missing, the death toll is likely to rise. Danger is constant aboard a converted oil tanker floating 50 kilometers off shore and loaded with complex oil and gas processing equipment and jet-engine powered generators.

“In our experience, it is difficult to imagine the missing surviving,” said Jose Maria Rangel, head of Sindipetro-NF, Brazil’s largest offshore oil union.

The toll of dead and injured was confirmed by the union, Petroleo Brasileira SA, as the company is known, and Brazil oil industry regulator ANP.

The blast was caused by a gas leak on board the Cidade de São Mateus, a floating oil production, storage and offloading ship (FPSO), said Davidson Lomba, finance director of Sindepetro-ES, the union representing workers on the platform.

The ensuing fire was quickly contained, the vessel stabilized, and oil and gas output halted, ANP said in a statement, adding that no oil leaked into the ocean.

The FPSO, owned by Norway-listed ship leaser BW Offshore Ltd , also processes natural gas that is sent to shore by undersea pipeline. The platform produces about 2.25 million cubic meters (88.3 million cubic feet) a day of natural gas and 350 cubic meters (2,200 barrels) a day of oil, according to ANP.

While the platform accounts for less than 3 percent of gas production at Petrobras, and less than 1 percent of oil output, it comes as the company struggles through its worst crisis in history.

Security concerns had been mounting at Petrobras before the accident. Last month, three workers were seriously burned in a refinery explosion, one of several that has beset the company in the last two years.

Huge investments, money-losing fuel subsidies on imports and the largest debt of an oil company in the world have crimped cash and forced Petrobras to operate many facilities at full capacity for long periods without maintenance.

The company has also been dogged by a massive corruption scandal that has led to the arrest of three former Petrobras officials as well as the resignation of its CEO and five other top executives. Dozens of executives from major Petrobras contractors have also been arrested, leading to the cancellation of construction and repair contracts.

Such strains on operations have come as the company suffers from a series of accidents and forced maintenance orders at refineries and offshore oil platforms. Union officials also allege that the company’s increasing reliance on non-union contract workers has put installations and people at risk.

“It’s our position that Petrobras is using too many contract workers who are not always qualified to operate equipment safely,” Lomba said.

The latest accident is also likely to damage a giant advertising campaign to promote the company’s off-shore achievements in the face of months of corruption-scandal news.
Petrobras said in a statement that 74 workers were on board at the time of the accident. Six of them remain missing, the company said. Officials at BW Offshore in Norway and Brazil were not immediately available for comment.

The platform operates in the Camarupim field 75 kilometers (47 miles) northeast of Vitoria, the capital of Espirito Santo state and the principal oil-service port on the Espirito Santo coast. Camarupim is 100 percent owned by Petrobras.

The FPSO also processes oil and gas from the neighboring Camarupim Norte field owned 65 percent by Petrobras and 35 percent by Ouro Preto Energia.

Lomba said it was still unclear if the dead and injured workers were members of his union, third-party Brazilian workers, or foreign employees of BW Offshore.

The Cidade de São Mateus began operating in the field in 2009 and is under contract until 2018 with an option for an extension until 2024, according to the BW Offshore web site.
Petrobras preferred shares, the company’s most-traded class of stock, rose 1.23 percent to 9.03 reais in Sao Paulo on Wednesday.

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