Suspension of Works at Comperj by Kerui-Método Consortium Could Lead Companies to Bankruptcy and Mass Layoffs

The Companies Operating at Comperj Have Been Meeting with Representatives of the Itaboraí City Hall to Enable the Gradual Resumption of Works.

Reduced action at Comperj, with the pandemic, not only Petrobras but all oil companies will take their foot off the accelerator affecting jobs throughout the supply chain of the sector. The economy of Rio depends on oil. If the oil and gas market is doing well, Rio is doing well. 45 thousand workers in the oil and gas sector are at risk of losing their jobs

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At Comperj, only 30 percent of the six thousand workers hired for the construction of the Natural Gas Processing Unit (UPGN) and the gas pipeline network of the so-called Route 3, which will transport natural gas from the pre-salt fields of the Santos Basin, are on construction sites.

Just over four thousand workers are on collective vacation. Petrobras stated, in a note, that it has “temporarily suspended” works at Comperj in response to a letter from the Itaboraí Municipal Health Secretariat requesting the interruption of 70 percent of the project’s activities to help contain the coronavirus.

Projects Paused at Comperj

The companies involved in the reduced Comperj project have been meeting with representatives of the Itaboraí City Hall and health authorities to enable the gradual resumption of works.

The suspension of the works on the Natural Gas Processing Unit (UPGN) at Comperj by the consortium formed by the Chinese company Kerui and the Brazilian Método Engenharia will have serious consequences in the region, potentially leading to mass layoffs.

In a letter sent to suppliers, Kerui blames the pandemic and has worried Brazilian companies participating in the construction project of the UPGN, supplying equipment and services, in addition to alarming national companies that are already creditors of the work.

According to Kerui, the consortium will prioritize payments to Chinese and foreign supplier companies. Another blow of this type could mean bankruptcy for these Brazilian companies, worsening unemployment.

Check the letter sent by the consortium to the companies that Petronotícias had access to

“First of all, it is important to emphasize that KERUI MÉTODO was contracted by Petróleo Brasileiro S.A. – PETROBRAS (Contract No. 0804.0106414.17.2) for execution, under a global price contract, of the remaining works of the Natural Gas Processing Units, hereinafter referred to as the “UPGN Project.”

The company has been executing services as established contractually with PETROBRAS, but was negatively surprised by the crisis generated by the coronavirus pandemic (COVID-19). In this sense, it is worth mentioning that the first case of coronavirus was identified in early December 2019 in China, spreading rapidly across Asia and then the world. Given its high contagion capacity, China declared a “lockdown” in January 2020, suspending the production of equipment that was in the final stages of manufacturing, causing significant delays in the delivery of items essential for the UPGN Project.

On March 11, 2020, the World Health Organization – WHO raised international importance alerts with the Declaration of Pandemic due to the new coronavirus. The coronavirus pandemic also postponed the shipment of equipment manufactured in Thailand, as ships were prevented from meeting the shipping schedule due to health restrictions and the implementation of strict access protocols.

As a result of the problems brought about by the coronavirus pandemic to the world, on March 20, 2020, the occurrence of a public calamity was officially recognized by the Federal Senate (Legislative Decree No. 06/2020), a situation that has been bringing severe negative impacts to Brazil, especially regarding social and economic aspects. In order to contain the proliferation of the coronavirus, the Municipal Health Secretariat of Itaboraí/RJ, through Official Letter SMS/SSVS/nº 021-2020, dated March 23, 2020, determined the interruption of at least 70% (seventy percent) of the field activities of the workforce of the companies operating in the Municipality.

Due to the Official Letter issued by the Municipal Health Secretariat of Itaboraí/RJ, the works of the UPGN Project were partially suspended by PETROBRAS. This partial suspension, along with delays in the delivery of equipment, negatively impacted the cash flow of KERUI MÉTODO, mainly due to the postponement of measurements and, therefore, of its receipts. As a consequence of the pandemic, we know that this situation will also generate negative ripple effects throughout the supply chain, service providers, specialists, and consultants who, in a climate of continuous partnership and commitment, have been working with KERUI MÉTODO to develop the works of the UPGN Project.

In keeping with its duty of partnership and transparency, KERUI MÉTODO informs that this difficult moment will require sacrifice and unity from all in light of the seriousness of the problems. The situation experienced due to the coronavirus pandemic is unequivocal and serious, classified as force majeure, as it prevents KERUI MÉTODO from fulfilling certain obligations. Despite the severity of the scenario, KERUI MÉTODO has created a committee to carefully assess the impacts suffered by the pandemic and will make its best efforts to minimize the negative effects on its employees and partners, which is why it will contact you for individual discussions regarding the mitigation plan to be adopted, including rescheduling of payments.

In light of the above, KERUI MÉTODO thanks in advance for the efforts and understanding of this company and informs that it is collaborating with authorities, society, and clients to find the best way to reduce the impacts of this Public Calamity, within the environment of social responsibility and respect for human health. Without further ado, we remain available to clarify any doubts through the channel procurement@kerui-metodo.com.br, created for the purpose of issuing official communications, formalizing agreements, and clarifying doubts.”