Chevron Reacts to Criminal Charges in Brazil

By Stephen Eisenhammer, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Chevron has said they “will vigorously defend the company and its employees” against criminal charges filed by Brazilian prosecutors for an oil leak last November, dubbing the charges “outrageous and without merit.” The response came just hours after Brazilian prosecutors launched new charges against Chevron, the rig operator Transocean, and seventeen employees of both companies.

The prosecution is seeking the seizure of assets of both individual company officials in Brazil and their corporations on charges of “impeding the inspection by the public power, omitting […] obligations of environmental interest, presenting a deceptive emergency plan and misrepresentation in altering documents presented to the public authorities.”

The seventeen executives were banned from leaving the country and forced to hand in their passports. Chevron and Transocean have consistently denied the allegations, a Chevron statement declared: “Once all the facts are fully examined, they will demonstrate that Chevron and its employees responded appropriately and responsibly to the incident.”

They asserted that there was no technical or factual evidence to implicate any “willful or negligent conduct” surrounding the November spill and repeated that they had “collaborated transparently and completely with all the appropriate Brazilian government authorities.”

Chevron has faced mounting pressure for their role in an oil spill last November in the company-controlled Frade Field in the Campos Basin, offshore Brazil. The leak, which amounted to approximately 3,000 barrels of oil, was linked to a pressure-kick during the drilling process which broke the well walls and resulted in oil seeping from the reservoir.

Chevron temporarily suspended operations in the Frade Field after another small oil leak was discovered two weeks ago. The company said the action was a “precautionary measure” enabling a technical study to be done on the geology of the region.

Results of recent tests on oil from the new leak, three kilometers from November’s leak, indicate that it is from a different reservoir. “There is no evidence that the two sets of seeps are related,” Kurt Glaubitz, a Chevron spokesman, said in an email to press.

Chevron also said the oil from the new leak is heavier and contained no traces of drilling mud, suggesting it had not been caused by drilling.

Experts have suggested that the dramatic decision to close the Frade Field is an attempt to turn the emphasis away from Chevron and on to Brazil’s National Petroleum Agency (ANP). The field produces about three percent of Brazil’s total oil production and its closure will have a noticeable impact on the industry’s revenues.

The idea is that ANP will ask Chevron to restart production, which in effect would confirm that the spills were not as significant as Brazilian authorities have been making them out to be. Regardless, the events are likely to have long-lasting effects on the industry.

Multinational industry insiders have expressed alarm over the attempts of Brazilian prosecutors to pin personal liability charges on the executives of Chevron and Transocean. “These guys are being treated like criminals for communal decisions taken at the corporate level, it’s very worrying,” a senior official for an oil major, who asked not to be named, explained.