Oil and Gas

UPDATE 5-Petrobras Brazil refinery blast injures 3, workers protest

* Workers suffered burns to 10-75 percent of bodies

* Petrobras does not say how refinery output affected

* Union says protest to cause small output cut (Adds work slowdown)

RIO DE JANEIRO, Jan 19 (Reuters) - Three workers were seriously hurt in an explosion on Sunday at Petrobras’ 323,000-barrel-a-day Landulpho Alves Refinery (RLAM) outside the northeastern city of Salvador, the second serious accident at Brazil’s second-largest refinery in a week.

The union will stage a wildcat protest strike until Tuesday morning, Cedro Silva, a director of SindipetroBA, the union representing workers at RLAM, told Reuters. The protest, which includes reducing workers at the refinery and working to rule, will slow output by a small yet significant amount, he said, without specifying by how much.

Petroleo Brasileiro SA, as state-run Petrobras is formally known, declined on Monday to say if oil processing or fuel output at RLAM was affected by the accident. It will not affect fuel supplies to Brazilian consumers, the company said.

The explosion occurred in the U-38 hydrogen generation unit. The unit has no production directly related to it, according to Thomson Reuters refinery data.

The injured workers suffered burns to between 10 percent and 75 percent of their bodies and are being treated at a hospital.

The accident revives safety concerns at Petrobras’ 14 Brazilian refineries, which have been operating near full capacity to meet domestic demand that has grown faster than its ability to supply it.

While a nearly 50 percent drop in crude prices since June means that Petrobras is no longer losing money on gasoline and diesel imports, the company may still not be able to shut units and perform upgrades, union officials said.

A recent price-fixing, bribery and political kickback scandal has cut Petrobras out of capital markets and led the company to stop paying for or working with some of the country’s most important construction and engineering firms. Many of those firms are the same ones which build, expand and repair Petrobras refineries.

“Thousands of contract workers at the refineries are being laid off and work is shutting down,” said Simão Zanardi, head of legal and institutional affairs for FUP, Brazil’s national oil workers’ federation.

“It is our feeling that most of Petrobras’ refineries are not operating as safely as they should be.”

The injured workers at RLAM were using an electric rotary sander on the inside of a hydrogen tank that had been drained on Thursday and where workers had already done the same work without incident, Zanardi said.

On Wednesday RLAM suffered a fire in its paraffin unit after a faulty valve at the plant, Petrobras’ oldest, leaked kerosene. No one was injured in that event. (Editing by James Dalgleish, Nick Zieminski, Alden Bentley and Lisa Shumaker)