Chevron May Reopen in Frade Field: Daily

By Mary Carroll, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The National Petroleum Agency (ANP) is to release the final report this week on the Chevron oil leak that occurred in November 2011 at the Frade Field in the Campos Basin off the coast of Rio de Janeiro. The report will outline final fines and penalties, and it is also expected that Chevron will be allowed to return to production in the field in the very near future.

Magda Chambriard, the director general of ANP, said that ANP had identified around twenty-five offenses in relation to operational safety standards. “As there are more than twenty offenses, they will carry a small fine, but it is not something of R$1 million to R$2 million, it is far more than that,” the director general explained.

In March 2012 Chevron, on its own accord, announced the suspension of production when a second smaller leak occurred in the area. Now ANP is considering Chevron’s request to re-produce the Frade Field.

“They (Chevron) requested the resumption of production, we are analyzing it and, in principle, we have nothing against it, we see no difficulty in this return, because the suspension of production was ordered by the company,” said Chambriard.

ANP has estimated that the November 2011 leak was approximately three thousand barrels of oil. The suspension of production at the Frade Field, which is co-owned by Petrobras and co-operated by Transocean, had stopped the capacity to produce 80,000 barrels a day, more than three percent of Brazil’s oil output.

ANP will also prepare a report on the second oil spill which will be used to set the penalties. Chambriard clarified that the fines would not exceed R$50 million. Currently, each fine could reach $2 million.

Concern over the relative low amount of fines allowed under current regulation in the oil sector has led the ANP to propose changes in the law in relation to penalties, which they have already filed with the Department of Mines and Energy.

In April a seventh leak since the beginning of 2012 was attributed to Petrobras, the last just 500 meters from the boundary with the Frade Field, where Chevron has been criminally charged for their two leaks.

Shortly after a Brazilian judge moved the two R$20 billion civil cases against Chevron, and rig operator Transocean, for the offshore oil leaks to a different court in Rio de Janeiro, removing the case from the initial prosecutor.

Read more (in Portuguese).

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