Canadian Manufacturing

Rogue workers blockade Argentina’s largest oil operation

The takeover of the plant that caused millions of dollars in damage to Argentina's largest oil wells and fifth largest gas wells.



BUENOS AIRES—Renegade union workers refused to end their blockade of one of Argentina’s largest oil and gas operations Tuesday, adding to the millions of dollars in lost profits and vandalism already suffered by British and Chinese energy companies.

A judge on ordered police to evict the protesters blocking the Cerro Dragon energy complex, an important supplier of oil and natural gas that has been mostly forced off line for 12 days, leaving thousands of people out of work and creating a potential energy supply crisis in southern Argentina.

Judge Eva Parcio in the Patagonian city of Comodoro Rivadavia told provincial police in Chubut to remove demonstrators that have blocked highways leading to Pan American Energy Co.’s complex of oil and gas wells. The complex is jointly owned and operated by BP PLC and Argentine and Chinese investors.

The blockaders, known as “The Dragons,” represent subcontracted, temporary construction workers who are demanding 23 per cent wage increases similar to those gained by permanent Pan American Energy staff.

They blocked highways after ending a takeover of the plant that caused millions of dollars in damage to Argentina’s largest oil wells and fifth largest gas wells. Cerro Dragon alone provides up to 18 per cent of Argentina’s crude production and six per cent of its natural gas.

Pan American Energy hasn’t publicly divulged its losses, but Chubut province said it has been losing $881,000 in royalties daily. And with provincial highways blockaded, thousands of workers for other provincial oil operations, suppliers and other companies have been kept away. Tecpetrol, Capsa and YPF SA are among the companies affected.

A group of those workers called off plans for a counter-march to the highway blockades, even though the Dragons defied the judge and police entreaties to open the roads. Provincial deputy Carlos Gomez, who also is a leader of the Private Oil Workers of Chubut union, said that both private and public salaries for July might not be paid and that 14,500 people are out of work.

Pan American said in a statement Tuesday that it is doing what it can to maintain energy supplies. Cerro Dragon is producing 61 per cent of the oil it was extracting before the takeover and providing 51 per cent of its usual output to southern Argentina.

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