A Brazilian federal prosecutor on Tuesday launched his second 20 billion real ($10.9 billion) lawsuit against U.S. oil company Chevron (CVX.N) and driller Transocean (RIGN.VX), doubling the stakes against the companies as critics call him as overzealous.
The new lawsuit, the prosecutor’s second civil case against the companies in less than five months, is related to an oil leak discovered on March 4 in Chevron’s offshore Frade field northeast of Rio de Janeiro, the Federal Public Prosecutor’s office said in an email.
The new lawsuit, filed in federal court in Campos, north of Rio de Janeiro, also seeks to prevent Chevron and Transocean from operating in Brazil, transferring Brazilian profits overseas, obtaining government-backed finance and moving equipment from the country, the statement said.
Chevron and Transocean are facing further legal battles in Brazil’s promising oil market after the industry’s largest workers union filed a civil lawsuit against the companies for last year’s spill off the coast of Rio de Janeiro.
The US oil company and its drilling partner are already facing a R$20bn (US$11bn) lawsuit and criminal charges for the leak at Chevron’s Frade field last November, which was small by industry standards at no more than 3,000 barrels.
FUP, Brazil’s oil workers federation, said on Wednesday it had filed a civil lawsuit at a federal court in Rio de Janeiro requesting the cancellation of the companies’ rights to operate in the lucrative offshore field.
The Brazilian judge handling criminal charges against U.S. oil company Chevron , drill-rig operator Transocean and 17 of their employees over a November oil spill granted two of the accused permission to leave Brazil to visit their families, documents posted on Monday on a court Web site showed.
The decision could be a sign courts will be lenient with defendants during a unprecedented Brazilian criminal case that could last years and result in prison sentences of up to 31 years.
The employees, Transocean’s offshore superintendent Gary Marcel Slaney, 58, a Canadian, and British citizen Brian Mara, 45, a Transocean drilling technician, were allowed to leave Brazil on March 21, the day the charges were filed and return April 19, according to documents on the Federal Court Web site.
Chevron has faced heat in Brazil for leaking about 2,400 barrels of oil from the Frade field 230 miles off the coast of Rio de Janeiro last November, with criminal charges filed last week against the company as well as drilling contractor Transocean RIG +0.41% .
But one analyst is looking at the bright side.
Pavel Molchanov of Raymond James said Monday that Brazilian officials “appear to be softening their language,” against the San Ramon, Calif.-based oil major.
Opinions are divided in Brazil over the prosecution of U.S. oil giant Chevron for two oil spills. While some argue that the legal action is an over-reaction triggered by nationalism, others say it is necessary to show that Brazil is serious about protecting the environment.
The public prosecutor’s office filed criminal charges this week against Chevron for the November oil spill that dumped 2,400 barrels of crude and for a smaller leak in March, both of which occurred at the Frade field, 370 km off the coast of Rio de Janeiro
Chevron says the second spill at the well, located at a depth of 1,200 metres in the Campos basin, involved just five litres. But experts say that much more oil was leaked, and that the oil slick is one square kilometre in size, near the first leak.
An overreaction, or the response of a government that has learned from the mistakes of others?
Either way, Brazil has been aggressive about a 110,000-gallon oil spill last November, as well as a current leak, from a deepwater drilling rig 230 miles off the coast of Rio de Janeiro. The rig is controlled by oil giant Chevron Corp. and managed with its partner, Transocean Ltd. According to the head of the federal police’s environmental affairs division, Chevron and Transocean insisted on drilling at an excessive pressure.
Following the spill, Brazilian authorities suspended Chevron’s drilling activities, denied it access to new offshore fields and seized the passports of 17 company executives. “There is no doubt that the departure of these individuals from our country, at this time, would pose a serious risk to the (spill) investigation, and the possible enforcement of a criminal law,” said Judge Vlamir Magalhaes, who signed the seizure order.
A Brazilian prosecutor plans to allege this week that Chevron and Transocean should not have drilled a deep-water well that leaked in November, legal documents showed, giving a glimpse into expected criminal charges that could slow the rush to develop Brazil’s vast offshore oil wealth.
The accident cracked geological structures in the reservoir and oil will continue leaking from the field until it is emptied, the prosecutor Eduardo Santos de Oliveira told Reuters in a telephone interview on Monday.
The prosecutor’s comments expanded on his investigations and police reports being used to assemble criminal indictments against U.S. oil company Chevron, drill-rig operator Transocean, and 17 of their executives and employees.