Brazil slaps $17.5m fine on Chevron for Rio spill - P.M. News

Brazil slaps $17.5m fine on Chevron for Rio spill


Brazilian authorities said Monday they were slapping a $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 one million reais under the law,” Chambriard said, adding that it would be imposed “in the next two months”.

And Chevron could be hit with an additional fine of $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 370 kilometers (230 miles) northwest of Rio.

In August, 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 noted. Brazil’s state-owned oil giant Petrobras needs Chevron’s assistance for its own operations.

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Last year, the Brazilian environment institute Ibama already imposed two fines worth a total of $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 two million barrels a day.

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

Transocean meanwhile is still operating in Brazil but is under court order to stop doing so in mid-October. 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 $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 $11 billion for what they have called “immeasurable” environmental damage.

In March, another oil spill was detected at a depth of 1,300 meters (4,200 feet) in the Frade field, in which Petrobras has a 30 percent stake, not far from the site of the bigger spill in November.