U.S. oil major Chevron Corp. (CVX) faces heavy fines in Brazil after
the company accepted responsibility for an oil spill at
an offshore field, including the possible loss of a key license that
allows Chevron to operate in deep waters that potentially hold billions
of barrels of crude, government officials told reporters late Monday.
Brazil’s leading environmental regulator, the Brazilian Institute of
the Environment and Renewable Natural Resources, or Ibama, imposed late
Monday a 50 million Brazilian reais ($28 million) fine for environmental
damages after a drilling incident caused between 2,400 barrels and
3,000 barrels of oil to leak into the Atlantic Ocean near Chevron’s
Frade field, according to company and government estimates.
But the penalties could rise dramatically as Chevron confronts a
political backlash over the spill, including charges that the company
withheld information from regulators. Rio de Janeiro state officials
could levy fines of about BRL100 million, while Brazil’s National
Petroleum Agency, or ANP, announced two notices of infraction for
Chevron that could each carry fines of BRL50 million.
ANP Director Magda Chambriard said during a press conference in
Brasilia that Chevron “acted in complete violation of its concession
contract and Brazilian law.” According to Chambriard, who visited
Houston and accompanied the investigation of the Deepwater Horizon
disaster in 2010, Chevron edited 24-hour video images of the seabed. The
regulator was forced to travel to the platform to get the full 24-hour
video of oil seeping up from the seafloor.
In addition, ANP President Haroldo Lima said that a key piece of
equipment needed by Chevron to abandon the well that was the source of
the spill did not arrive in Brazil until Sunday. The ANP had approved
Chevron’s plan to abandon the well in an urgent review, but under the
impression that all the necessary equipment needed to carry out the plan
was in place, Lima said.
Given the circumstances, Lima called into question Chevron’s status
as an “A” operator under the ANP’s drilling criteria. “A” operators are
allowed to explore in ultra-deepwater areas such as the country’s
much-ballyhooed pre-salt region. “B” operators are confined to explore
shallow-water areas, while “C” operators can explore only on land.
Further complicating matters is Chevron’s request to drill a pre-salt
well, which was to be considered by the ANP on Tuesday, Lima said.
“Certain prerogatives that the company has as an A operator are going to
be better examined,” Lima said. “We can’t anticipate [what will
happen], but the recent facts introduce relevant data and the result may
not be what the company expected previously.”
gCaptain