Wed, Sep 19, 2012 - Page 7 News List

Chevron fined US$17.5m over big oil spill in Brazil

AFP, RIO DE JANEIRO

Brazilian authorities said on Monday they were slapping a US$17.5 million fine on US oil firm Chevron in connection with a major spill off Rio de Janeiro state last year.

Magda Chambriard, director general of the National Petroleum Agency (ANP), told a press conference that the new fine covered 24 infractions.

“There is one [missing fine] related to the abandonment of the well. The maximum limit is 1 million reais under the law,” Chambriard said, adding that it would be imposed “in the next two months.”

Chevron could be hit with an additional fine of US$50,000 for “other items.”

Brazil’s national oil regulator estimated that 2,400 barrels of crude were spilled in the November accident.

A report by ANP released in July accused Chevron of negligence and said the company could have avoided the spill, which occurred in the Frade field, located 370km northwest of Rio.

Last month, a Brazilian court ordered Chevron and its driller Transocean to stop their oil drilling and shipping activities within 30 days.

Chambriard said ANP would turn to the Supreme Court after a lower court rejected its earlier appeal to overturn the suspension of Chevron’s operations, the state Agencia Brasil reported. ANP wants the suspension lifted “so as not to hurt oil production in Brazil,” the agency said. Brazil’s state-owned oil giant Petrobras needs Chevron’s assistance for its own operations.

Last year, the Brazilian environment institute Ibama already imposed two fines worth a total of US$33.4 million on Chevron for environmental damage and failings in its emergency plan during the accident.

Chevron has a small operation in the Frade field, producing only 60,000 barrels a day, but that is important to ensure that Brazil meet its target of a production of 2 million barrels a day.

The resource-rich country hopes to double output to 4.2 million barrels a day in 2020.

Meanwhile, Transocean is still operating in Brazil, but is under court order to stop doing so in the middle of next month. A suspension would also affect Petrobras, which has contracted eight rigs from Transocean.

Earlier this month, a court official said the head of Chevron’s Brazil unit would be allowed to leave the country after posting bail of US$245,000 in connection with the November spill.

The official said judge Marcelo Luzio Marques Araujo set the bail amount to make sure George Buck returns to Brazil to stand trial “each time he is summoned.”

Brazilian authorities had confiscated the passports of Buck and 16 other people linked to Chevron and Transocean following the November spill.

State prosecutors had filed legal action against Chevron and Transocean over the November incident, seeking US$11 billion for what they have called “immeasurable” environmental damage.

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