Chevron Says Brazil Ban Overturned

By Andrew Willis, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – A Brazilian court has overturned a ban that prevented Chevron from operating in Brazil, according to a statement by the second largest U.S. oil company. The ban was handed down in September and relates to a November 2011 oil leak at the offshore Frade Field, located 370km northeast of Rio de Janeiro in the Campos Basin.

“Chevron is pleased with the court’s decision […] to dismiss the injunction,” company spokesman Kurt Glaubitz told The Rio Times on Monday, December 3rd.

“Chevron Brasil voluntarily suspended production activities in March 2012. In August, the company submitted its production restart plan to the National Petroleum Agency (ANP) and is working with regulatory agencies for a safe restart,” he added.

In a related development, Chevron and rig operator Transocean are expected to announce new operational and safety measures at a public meeting to be held in Rio de Janeiro on December 14th.

“The company’s […] defendants in civil lawsuits, will present to the Federal Public Ministry a compromise proposal for a behavioral adjustment,” reads a document, released Friday, November 30th by the office of federal prosecutor Gisele Porto.

In September Chevron paid US$17.3 million to the ANP for irregularities related to the November 2011 oil spill, receiving a discount for prompt payment. The regulator cleared Transocean, which owned the rig in operation at the Frade Field, of any blame.

Yet in two civil suits, Brazilian prosecutors have sought R$20 billion in damages for the leak, the largest-ever environmental prosecution in the country’s history. Porto is the lead prosecutor on the civil lawsuits, having taken over from Eduardo Santos de Oliveira who successfully secured the injunction.

Both companies have denied any wrongdoing. “Chevron Brasil is confident that at all times it acted diligently and appropriately, and in accordance with the best practices in the oil industry. Chevron Brasil’s response to the incident was implemented according to the law, industry standards and in a timely manner,” the firm’s spokesman said recently.

“Continuous monitoring of the incident area shows no discernible environmental impact to marine life or human health. No oil has reached Brazil’s coast. We have received no information that anyone was harmed as a result of the incident.”

Under the civil lawsuits, seventeen Chevron and Transocean executives are also charged with crimes that carry jail terms of up to 31 years.

Brazilian officials estimate the November spill at roughly 3,600 barrels of oil, far less than the five million barrels that spilled following BP’s Deepwater Horizon disaster in the Gulf of Mexico in 2010.

Petrobras, Brazil’s state-led oil company, is among those who have fought to have the ban against Chevron and Transocean overturned. Petrobras currently rents seven of the ten rigs Transocean has in Brazil, with their removal threatening to reduce oil production at the Brazilian firm.

As a result, Petrobras has lent legal assistance to the two foreign companies. In October, Brazil’s superior court of justice partially overturned the ban against Transocean, allowing it to operate rigs in Brazil, with the exception of the Frade Field.