Chevron not negligent in oil spill, says Brazil regulator

23 March 2012
By Sofia Mitra-Thakur
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Oil leak off the coast of Rio de Janeiro

Oil leak off the coast of Rio de Janeiro

An oil spill off the Brazilian coast in November was not due to negligence by Chevron or drill-rig operator Transocean, Brazil's oil regulator has said.

Silvio Jablonski, a senior official at oil regulator ANP, told a Senate hearing that the accident at the Frade oilfield was caused by mistakes and project errors, but that the agency's report on the spill would not use the word "negligence."

His statement provided a boost to Chevron, Transocean and company executives as they face criminal charges.

The hearing came one day after a Brazilian federal prosecutor filed criminal charges against U.S. oil company Chevron, Transocean and 17 of their employees.

Both companies have denied the charges, which carry prison terms of up to 31 years.

The Chevron spill, which at 2,400 to 3,000 barrels amounted to less than 0.1 per  cent of BP's 4.6-million-barrel Gulf of Mexico disaster, never reached beaches and was quickly controlled.

Jablonski also said that the Frade field does not appear to have been irreparably damaged by the accident - news that may help ease investor worries about the viability of the field.

The charges filed by the prosecutor this week include failure to realize protocols to contain the leak, failure to take steps to kill the well and stop the drilling process, failure to meet legal and contractual duties, and others.

An influential senator from President Dilma Rousseff's party criticized the charges as "excessive" and "irresponsible" in an interview prior to the hearing.

Senator Jorge Viana said the charges "create a climate of insecurity" that could damage badly needed investment in the oil sector.

If the charges, plus an $11 billion civil suit filed against Chevron and Transocean in November, were fairly applied to other polluters, "the industry would shut down," said Viana.

"Brazil is entering a phase in which we need investment from all over," said Viana.

Rousseff, a former energy minister who sat on the board of state-run oil company Petrobras, has remained mostly silent about the Chevron case.

She has warned that foreign companies in the oil sector need to respect Brazilian regulations, but has refrained from criticising the Chevron executives or the company in public.

Rousseff sees the case "as a legal issue, not a governmental one," an anonymous senior official told Reuters earlier this week.

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