ENVIRONMENT-BRAZIL: Petrobras Credibility Sinks with Giant Oil Rig

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Mar 20 2001 (IPS) - The world’s largest offshore oil rig, Platform 36 of the Brazilian petroleum giant Petrobrás, sank Tuesday in waters northeast of here, taking with it the credibility of the state-run firm’s management policies, which are geared toward competition and increased profits.

Last Thursday, 10 people died as a result of three explosions on the rig, located in an area known as Cuenca de Campos, 120 km off the Brazilian coast.

The bodies of eight firefighters have not been found and are now believed to be on the ocean floor, inside the gigantic oil rig that had 175 people working on its decks at the time of the blasts. One of the support columns was damaged in the explosions – the origins of which are unknown.

One man who was gravely injured continues in the hospital with burns over 98 percent of his body, though his doctors say there is little chance he will survive.

The efforts of the last five days to maintain the platform afloat were frustrated Tuesday when the rig began to list further and then went under.

A new battle began at that moment to prevent environmental damage from the 1.2 million litres of diesel fuel and 340,000 litres of crude that were in the platform’s tanks and in the pipes connected to the wells at sea bottom.

Cuenca de Campos is home to Brazil’s most productive deep-water petroleum fields.

The loss of diesel is inevitable, due to the pressure on tanks at 1,600 m under water, acknowledged Petrobrás president Henri Phillippe Reichstul. But there is still hope that the pipes will hold and that the crude will not be spilled into the surrounding seas.

The greatest environmental danger would be if spilled fuel reaches coast, where it would damage beaches that are an essential part of Brazil’s tourism industry, pointed out Rio de Janeiro state’s environment minister, André Correia.

The accident, the latest in a series of Petrobrás incidents over the last two years, calls into question the state-run firm’s administrative restructuring following the loss five years ago of its monopoly over oil production, imports and refining, a prerogative it enjoyed since it was founded in 1953.

The company maintains its grip on nearly the entire national oil market, but has been forced to prepare for future competition. It cut is personnel by 40 percent to its current 34,000 workers, and contracts out a large portion of its activities.

This could be one reason for the rising number of accidents suffered by Petrobrás workers, which have caused the death of 86 employees over the last three years, Reichstul admitted. Nearly two-thirds of the victims were employees of firms hired under the outsourcing policy.

The employees of the subcontracted companies do not have the necessary training to work in the high-risk situations of an offshore oil platform, maintains Fernando Carvalho, coordinator of the Campos region’s Petroleum Workers’ Syndicate.

Carvalho pointed out that in Campos, the employees from outside companies number more than 30,000, while Petrobrás has just 7,000, though all are working on Petrobrás projects.

Reichstul, who took the reins of the state-run oil giant two years ago, said he is deeply distressed by this latest nightmare. Last year, Petrobrás, under his watch, was responsible for two oil spills that caused severe environmental damage.

Millions of litres of petroleum contaminated Guanabara Bay, adjacent to Rio de Janeiro, and the Igauzú River in the southern state of Paraná – two disasters with long-term ecological consequences.

Financially, however, Petrobrás has never been better off. Its profits reached nearly 5.0 billion dollars in 2000, boosted by the rising international oil prices.

In response to this chain of events, the Senate’s Infrastructure Committee decided to call on Reichstul, David Zylbersztajn, president of the National Petroleum Agency (ANP), and leaders of petroleum workers’ unions to ask them for their testimony in clarifying the cause of the accidents.

The ANP, created a few years ago, is the Brazilian regulatory body for all petroleum-related activity.

“Something is going wrong at Petrobrás” and it is essential to review its restructuring, stressed senator Paulo Hartung, of the Popular Social Party and member of the Infrastructure Committee.

Petrobrás, founded nearly a half-century ago as a result of a patriotic mobilisation, is a national symbol of pride because of its strong growth over the last two decades and its highly advanced technology in the area of deep-sea oil drilling.

The now sunken Platform 36, for example, extracted oil from wells dug at 1,360 m below the ocean surface. Its equipment handled 84,000 barrels a day, but its capacity was of 180,000 bpd, a volume that made it the largest offshore oil rig in the world.

Petrobrás production represents nearly 80 percent of Brazil’s total consumption, though the goal is for the country to be completely self-sufficient by 2005.