Petrobras Halts Giant Production Unit as Safety Problems Found

Source: Reuters 3/20/2015, Location: South America

Brazil's state-run Petrobras shut its P-58 offshore oil production ship after the country's petroleum regulator ANP found irregularities on board the vessel, one of the company's most important offshore production systems.

The ship was producing 106,000 barrels of oil and natural gas equivalent a day in January, 84 percent of it crude, from seven wells, according to the latest ANP figures. That was 4.1 percent of Petrobras' total Brazilian output in the month.

The floating production, storage and offloading ship (FPSO) received oil from the Parque das Baleias project, a group of fields in the Espirito Santo Basin, about 115 kilometers (71 miles) southeast of Vitoria, Brasil.

The shutdown comes a little more than a month after a deadly explosion on a Petrobras offshore oil and natural gas production ship operated by BW Offshore Ltd, a Norwegian-listed production vessel operator. That and a series of refinery accidents have led unions to attack the company's safety record.

The pressure of a much-delayed $221 billion, five-year investment plan, rising debt and a corruption scandal that has forced Petrobras to stop work with many important contractors, is stretching workers and equipment to their limit, according to FUP, the country's national oil union confederation.

Workers on the FPSO say production began with many systems incomplete, forcing workers to finish construction on the high-seas instead of a shipyard.

"We have been complaining about safety problems since production started, but with other production unit accidents, the ANP finally decided to inspect the production units," Davidson Lomba told Reuters in a telephone interview.

"We finally decided to stop doing any more construction work on the production unit," he added. "Not only is it more expensive to do the work at sea, it's more dangerous."

In statements confirming the shutdown, Petroleo Brasileiro SA, as Petrobras is formally known, said the move was preventative, aimed at improving efficiency at a vessel that has been producing for a year, but is only now receiving its final commissioning.

Thanks to its incomplete systems, the FPSO P-58 was operating at only about 60 percent of its designed capacity of 180,000 barrels a day when output was stopped, Lomba said.

The P-58 was Brazil's No. 5 production unit in January and one of only six that produce more than 100,000 barrels a day.

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