Chevron’s Brazilian oil spill, tiny in comparison to major spills like BP’s Macondo well in the Gulf of Mexico in 2010, has cost the company dearly. It was forced this week to close off its Frade field well in the Campos Basin, 230 miles (370 km) off the coast of Rio de Janeiro. It has to deactivate its drilling platform. In short, Chevron now has one foot out of Brazil and it just might cost them $2.5 billion — which is what the company spent on their Brazilian oil venture.
Brazil was never known as a place for oil. But around 2007, government owned oil company Petrobras made headlines when it found multiple fields of black gold deep under the ocean floor. There are not many country’s that allow for foreign oil companies to drill on their home turf, but Brazil does and so ever segment of the global oil economy, and every big name from Russia to Norway to the U.S. has a stake in Brazilian oil production. For the Western world, this country’s newfound oil wealth is the Saudi Arabia of the Atlantic Ocean. And while volume surely could not compare to desert oil fields in the Persian Gulf, friendly politicians made up for it. One small spill has ruined that for Chevron, at least for now, and maybe for years to come.
Brazil’s National Petroleum Agency said Monday it has set up a committee to analyze new oil leaks discovered on the sea floor in the offshore Frade field, where U.S. oil major ChevronCorp. (CVX) has drilling operations.
The agency, known as the ANP, said submarine footage taken Thursday showed five points along an 800-meter-long crack in the seabed where droplets of oil were escaping.
So far, there are no signs that the leak is worsening, the ANP added. Chevron has suspended all oil production in the Frade field, which lies offshore from Rio de Janeiro.
Brazil’s Environment Institute ordered US oil giant Chevron to pay another fine related to the early November oil spill off the coast of Rio de Janeiro.
The agency, known as Ibama, ordered Chevron to pay 5.4 million dollars for failures in the company’s emergency plan. Ibama earlier fined Chevron 28 million dollars for environmental damages caused by the spill.
The agency said it discovered an “absence of equipment in the emergency vessels and a delay in the first response to the spill,” the statement read.