Brazil suspends Chevron drilling rights after spill

November 24th, 2011 - 12:06 pm ICT by IANS  

Rio de Janeiro, Nov 24 (IANS/EFE) Brazil’s National Petroleum Agency, or ANP, said Wednesday it has temporarily barred Chevron Corp. from drilling new wells after an oil spill two weeks ago.

The ban will last “until the causes and those responsible for the oil spill are identified and safe conditions are re-established” at the offshore Frade field where the accident occurred, the regulator said in a statement.

The measure will not hinder well-abandonment activities, according to the ANP, which accused the company of not adhering to high industry standards and of negligence in both its drilling and development and execution of a safety plan.

The environment secretary of Rio de Janeiro state, Carlos Minc, said the ANP is considering preventing Chevron from participating in new auctions for oil-drilling rights over the next five years, although the regulator has not confirmed that information.

Minc also said at a press conference that Brazil’s Federal Police may file criminal charges against seven company executives, who could even face prison time if found guilty of violating environmental laws.

The spill began Nov 8 at an appraisal well in the offshore Campos basin due to an “unexpected pressure spike or ‘kick’” during “drilling toward a targeted reservoir”, Chevron said this week in its preliminary assessment of the incident.

The San Ramon, California-based company estimates that a total of 2,400 barrels of crude leaked from the well, although Rio de Janeiro authorities say close to 15,000 barrels were spilled.

The company has dispersed or recovered the majority of the crude that rose to the surface and the oil sheen, located some 120 km off the coast of Rio de Janeiro state, has almost completely dissipated, Minc said Wednesday.

Brazilian environmental authorities on Monday ordered Chevron to pay 50 million reais ($28 million), while the ANP is considering slapping the oil supermajor with another two fines for a similar amount and the Rio de Janeiro state government is preparing to sue the company for 100 million reais ($56 million) in damages.

Chevron Brasil Upstream Frade Ltda., a Chevron Corp. subsidiary, is the lead operator in the Frade field with a 51.7 percent stake.

Brazilian state oil giant Petrobras has a 30 percent interest in the project and the Frade Japao Petroleo Ltda. consortium controls the remaining stake.


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