Chevron, Transocean may face restrictions after Brazil spill

Chevron Corp. (CVX), the second-largest U.S. crude producer, and Transocean Ltd. may have operations restricted in Brazil following an oil spill in deep waters off the country’s coast.

Chevron may lose its status as a “class A” operator, which allows it to develop deep-water fields, after drilling at its Frade project triggered a leak of as much as 3,000 barrels in eight days, Harold Lima, the head of Brazil’s oil regulator, told reporters in Sao Paulo today. The agency, known as ANP, will also look into banning Brazilian operations of Transocean, responsible for the rig that drilled the well, Lima said.

“If we have reasons to do this, we will,” Lima said, referring to a downgrade of Chevron’s status. “It will depend on a detailed analysis.”

Chevron, based in San Ramon, California, has taken full responsibility for the spill and brought it under control as fast as it could amid stormy weather in the region, George Buck, head of operations in Brazil, said yesterday. Chevron spilled oil at the Frade project in deep waters of the Campos Basin after a surge of pressure from an oil reservoir on Nov. 7 damaged a well and caused a leak, Buck said in Rio de Janeiro.

“The moment the seeps were first identified, we immediately activated our emergency response plan and began dispatching necessary resources to safely manage the situation,” Lloyd Avram, a Chevron spokesman, said in an e- mailed satement today.

Chevron has halted the flow of oil from the reservoir and reduced the amount of oil seeping from fissures in the ocean floor near the drilling site, Buck said. Transocean wasn’t responsible for the leak and acted fast to help block it, Buck said.

Rio Ban

Transocean Ltd. (RIG) will be banned from operating in Rio de Janeiro state, the state’s environment secretary, Carlos Minc, said today. The company will be fined as much as 50 million reais ($28 million) and may be ordered by a court to make damage payments, Minc told reporters in Rio de Janeiro today. Chevron is co-responsible for the spill, he said.

Company spokesman Guy Cantwell declined to comment on the possible operating ban.

Transocean has 10 rigs operating in Brazilian waters, including the Petrobras 10000, a 2-year-old vessel designed to drill seven miles beneath the sea surface and withstand 47-foot waves.

5 Comments

  1. pdh42

    Hmmmm…. twice transocean is involved with an oil spill and neither time did they accept ANY responsibility…. Kind of makes one wonder how much they to blame….

    #1
  2. txloanguy

    Let’s fine Petrobas for using our tax money to drill for oil off our shores.

    #2
  3. AngryMama

    Risk of drilling, just like risk of driving.

    #3
  4. ntangle

    just like risk of driving.
    ———————
    An imperfect analogy.

    If you’re a skilled, defensive driver operating a modern, well-maintained vehicle, you’re still at significant risk from other drivers. Although you wouldn’t be the one placing others at risk if you’re vigilant with these things.

    If you’re operating a state of the art, well-maintained rig with a well-trained crew, have thoroughly surveyed what you’re drilling into, and done the requisite contingency planning, the responsibility is still yours alone. If something does happen, the risk isn’t only to you and your crew. It’s to our shared environment.

    #4
  5. TXPILOT

    Every worthwhile venture has risks.

    #5