Crude output at Pan American's Cerro Dragon field in Chubut province has fallen about 75,000 barrels a day to around 19,000 barrels since Thursday, when 300 to 400 protesters took over production facilities at the field.
Natural gas production has fallen 3 million cubic meters a day, the company said, without offering more details.
"If the facilities are still occupied, we expect to see the total paralysis of oil and gas output in a maximum of 30 hours," the company said. "This could cause grave consequences for the domestic hydrocarbons supply and jeopardize gas distribution to localities served by the Patagonian pipeline."
Cerro Dragon normally injects about 6.5 million cubic meters of gas into Argentina's national gas pipeline system. The field ships gas to the city of Buenos Aires and smaller towns in southern Argentina.
"It's hard to get production back online quickly," Pan American Chief Executive Oscar Prieto said in a television interview late Friday.
Pan American said the protesters, who belong to a construction workers' union known as "The Dragons," stormed the area early Thursday and destroyed trucks, fiber-optic equipment and critically important monitoring equipment.
Prieto said the protest was totally unexpected.
The workers, who are demanding higher wages and legal recognition, took over a power generator, putting all of the company's oil and natural gas production in the area at risk, according to Pan American.
The protesters aren't Pan American employees but work as contractors for companies hired by Pan American.
Guido Dickanson, who leads the workers, said in a television interview the workers want to be treated and paid as if they were official oil union workers.
"We're all oil workers. It doesn't matter that we're not technically in the oil workers' union," he said.
Unionized oil workers are among the highest paid workers in Argentina.
"They have the highest salaries in the country," Prieto said, though he declined provide specific numbers.
The protesters have prevented around 6,700 workers from doing their jobs at the field, Pan American said.
The Cerro Dragon field is more than 50 years old, but it's still the most productive and important in Argentina, Prieto said.
Pan American has invested around $3.5 billion in the field over the past four years. Cerro Dragon is also one of the biggest fields of its kind in Argentina and is more than 15 times bigger than the city of Buenos Aires.
Because of the conflict, Pan American doesn't have any employees at Cerro Dragon and it is unclear when workers will be able to return.
BP PLC (BP) owns a 60% stake in Pan American. The remaining 40% is equally split between Argentina's Bridas Energy Holdings Ltd. and China's Cnooc Ltd. (CEO).
Write to Taos Turner at taos.turner@dowjones.com
Copyright ? 2012 Dow Jones Newswires
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