Brazil “on alert” over an oil spill from Ecuador

BBC UK, 06/10/2013

Brazil is “on alert” over an oil spill that originated in Ecuador and is travelling downstream towards the Brazilian Amazon.

In a statement, the Brazilian foreign ministry said the navy and other agencies had been informed, and help was offered to Ecuador and Peru.

Last month, an estimated 11,480 barrels of oil leaked from a damaged pipeline into the River Coca in Ecuador.

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Transocean Says Court Denied Request to Block Brazil Injunction

Alison Sider – The Wall Street Journal, 9/12/2012

A Brazilian appeals court has denied a request by the national oil regulator to suspend an injunction barring Transocean Ltd. RIG -0.91% and Chevron Corp. CVX +0.26%from operating in the country, Transocean Chief Executive Steven Newman said on a conference call Wednesday.

The court responsible for the case couldn’t yet confirm the ruling.

A Brazilian court banned the two companies from operating in the country in late July because of their roles in an offshore oil spill last year.
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Chevron not leaving Brazil

Kenneth Rapoza – Forbes, 09/06/2012

Speaking at an industry conference in Venezuela, Chevron’s Latin America president Don Stelling said the beleaguered oil major has no plans on leaving Brazil despite millions in fines for a Nov. 2011 oil spill.

Stelling’s comments come during a dry spell for Chevron, which was one of the hottest news stories in Brazil in late 2011 into 2012 due to a small oil spill far off the coast of Rio de Janeiro.  Company executives have been quiet about recent court action against the company. Chevron was partnering with Brazilian oil company Petrobras to drill for hydrocarbons at the Frade Field in the Santos Basin in the Atlantic when the Nov. spill occurred.

Chevron abandoned the field in March.

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Chevron Appeals Ban on Brazil Operations

Dow Jones Newswire, 8/16/2012

Earlier this month, a Brazilian court banned Chevron and drilling-rig operator Transocean Ltd. (RIG) for their roles in an offshore oil spill last year. The two companies had 30 days to halt operations or face hefty fines.

The latest ruling is part of court cases related to a drilling accident last November at the Chevron-operated Frade offshore oil field. The accident caused an estimated 3,700 barrels of crude oil to seep from cracks in the seabed. Chevron faces fines from local environmental and oil-industry regulators, while both companies face civil and criminal lawsuits brought by a federal prosecutor.

Both companies have denied any wrongdoing in the accident. Transocean previously said that it will appeal the court’s ruling.

How Brazil is making an example of Chevron

Paul M. Barrett, Peter Millard – Bloomberg Businessweek, 05/10/2012

Last Nov. 7 something went wrong at a deep-sea oil well operated by Chevron (CVX) 230 miles northeast of Rio de Janeiro. As a massive drill bit punctured reservoir N560, roughly 3,500 feet beneath the ocean floor, monitors revealed pressure much higher than technicians expected. The next day a routine flyover of the field, called Frade, in the Campos Basin, revealed oil on the water’s surface.

Chevron dispatched remote-controlled submarines, which found oil seeping through fissures on the sea floor directly above N560. The blowout preventer, a three-story-tall valve assembly, automatically cut off oil flow at the wellhead. This would not become another BP (BP)disaster, in which the blowout preventer notoriously failed. Still, George Buck, president of Chevron’s Brazil subsidiary, ordered the Frade well shut down. Chevron sent 18 vessels in rotation to contain the oil on the surface, and it readied pyramid-shaped steel caps to cover the seepage points. Workers completed the job in just four days. Buck saw the situation as under control. And technically, it was.

A petroleum engineer in his mid-forties, Buck has an MBA and has worked for Chevron for 23 years. He is 6-foot-5, slender, soft-spoken, and earnest to the point of social awkwardness. He arrived in Brazil in 2009, having worked from Alaska to Texas to Indonesia. He lives with his family in Rio’s fashionable Ipanema beach district. He is not a man about town. After three years in Brazil, he speaks little Portuguese, relying heavily on translators. Nevertheless, on the Frade spill, Buck thought he had made himself quite clear. “Chevron takes full responsibility for this incident,” he said at a press conference in Rio on Nov. 21. At a congressional hearing in Brasília two days later, he added, “Sincere apologies to the Brazilian people and the Brazilian government.”

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Oil, water and trouble

The Economist, 12/31/20111

The flow of oil from cracks in the seabed off the coast of Rio de Janeiro has long since slowed to a mere trickle. Not so the retribution against Chevron, an American oil company that was drilling in the Frade oilfield on November 7th when a sudden rise in pressure caused a leak.

Brazil’s environment agency, IBAMA, has fined the company 50m reais ($28m) for the leak. On December 23rd it levied a further 10m reais for poor contingency planning. The National Petroleum Agency (ANP), the industry regulator, has closed one of Chevron’s Frade wells and suspended the firm’s drilling rights. The Rio de Janeiro state government is suing for 150m reais. A federal prosecutor in Campos, a city in the north of the state, is demanding 20 billion reais in punitive damages and seeking an injunction to halt all operations in Brazil by both Chevron and Transocean, the subcontractor drilling for it in Frade. Federal police, meanwhile, want to bring criminal charges against bosses of both companies.

After the 4.9m-barrel spill from the Macondo well in the Gulf of Mexico in 2010, oil regulators around the world are in no mood for leniency. But the blitz against Chevron, for a leak of no more than 3,000 barrels, makes some industry-watchers wonder whether Brazil wants foreign oil companies at all. “The reactions are out of proportion with the size of the leak,” says José Goldemberg, an energy and environment specialist at the University of São Paulo. Petrobras, Brazil’s state-controlled oil giant, holds a minority stake in Frade, but none of the lawsuits or fines names it as a respondent. “I don’t think there would have been the same enthusiasm for big fines if Petrobras had been drilling.”

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Brazilian prosecutors seeking $10B in damages from oil company Chevron for offshore leak

AP/The Washington Post, 12/14/2011

Brazilian federal prosecutors said Wednesday they are seeking $10.6 billion in damages from U.S.-based Chevron Corp. because of environmental harm caused by an offshore oil leak.

The prosecutors are also asking a judge to order Chevron and Transocean Ltd., the drilling contractor for the well where the leak occurred in November, to halt all activities in Brazilian territory for an indefinite period.

“During an investigation, the attorney general’s office found that Chevron and Transocean were not capable of controlling the damage caused by the spill of nearly 3,000 barrels of oil, proof of a lack of environmental planning and management by the companies,” the statement read.

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