ANP Says Petrobras’ Refineries Recorded Sharp Drop in Production

RIO DE JANEIRO, BRAZIL – The sudden drop in demand for fuels prompted a sharp reduction in the utilization factor of Petrobras’ refineries, which are now prioritizing the production of Liquefied Petroleum Gas (LPG) to supply the domestic market, in addition to importing the raw material, said the director of the National Petroleum, Natural Gas and Biofuels Agency (ANP), Felipe Kury.

Failing to mention the extent of the drop in refineries, Kury repeated data earlier confirmed by the president of the state-owned company, Roberto Castello Branco, of sharp slumps in consumption of aviation kerosene (84 percent), gasoline (35 percent) and diesel (22 percent), in a webinar promoted Thursday night by the EPBR news agency.

“Due to the change in behavior in everyone’s lives, there was a large increase in demand for LPG, which was scarce at one point, but next week should have its supply normalized,” said the executive of the sector’s regulatory agency. “We have a mission to preserve supply,” he said.

According to the latest data from Petrobras, refineries operated with a capacity factor of 76 percent in March last year and dropped to 74 percent this year. “What we need is for the market to grow again, so that producers can dispose of their stocks, which are very high,” Kury said.

Protests

The reduction in production at Petrobras’ refineries is in line with the demand of the domestic market, but has prompted a protest by the Single Federation of Oil Workers (FUP), which started a campaign on social media demanding the retirement of the oil giant’s current president, #ForaCastelloBranco (#OutCastelloBranco).

In short videos outside the company’s refineries throughout the country, union activists denounce a drop of up to 50 percent in the units’ production and blame the company’s current price policy, which preserves parity with the international market.

The FUP advocates for prices to be reduced for the benefit of the population during the coronavirus crisis, in addition to the supply of free or subsidized fuel for ambulances, firefighters, and other vehicles involved in the fight against the pandemic.

According to Iran Gonçalves, president of Sindipetro-Ceará/Piauí, in a video outside Lubnor, one of the eight Petrobras refineries scheduled to be sold, the state-owned company has shut down all oil production platforms in Ceará and this will affect the economy of several municipalities that rely on the commodity’s royalties. In addition, Gonçalves says 400 workers will be unemployed.

According to Petrobras, all employees in the 62 platforms that will be shut down due to the crisis triggered by the Covid-19 pandemic to reduce production will be relocated and will have the option to join the Voluntary Layoff Plan (PDV) should they object to their transfer.

The reduction in production also aims to reduce the stock of derivatives, which has nowhere to be stored, with domestic consumption and exports both limited by the lack of demand.

Source: Estadão Conteúdo