Wednesday, November 23, 2011

Chevron and Brazil: no more drilling, under review (Bloomberg)

Chevron Blocked From Drilling in Brazil After Oil Spill at Deep-Water Site

A supply boat working around an oil spill at the Frade field located in the Atlantic Ocean northeast of Rio de Janeiro, on November 18, 2011. The spill, at an offshore well operated by the US energy giant Chevron off the Brazilian coast was detected 10 days ago. Photographer: Marcia Foletto/Agência O GLOBO/AFP
Chevron Corp., operator of the $3.6 billion Frade oilfield off the Brazilian coast, is blocked from drilling in the country while a recent spill is examined, the South American country’s oil regulator said.
Chevron’s “negligence” contributed to the spill and the company needs to pay more attention to safety precautions, the Agencia Nacional do Petroleo, or ANP, said today in an e-mailed statement. The ban will remain in effect until the regulator identifies the causes of the spill and considers it safe to resume drilling, ANP said.
The company “will adhere to all the rules and regulations of the government of Brazil and its agencies,” Lloyd Avram, a spokesman, said in an e-mail. Chevron, based in San Ramon, California, continues production from the field, he said. The stock dropped (CVX) 2.8 percent to $93.75 at the close in New York.
Brazil is sanctioning Chevron at a time other foreign oil companies such as BP Plc, Statoil ASA and Royal Dutch Shell Plc are accelerating exploration in deep waters off the coast of Brazil. The nation expects production to double during the next decade as it develops the largest oil discoveries in the Western Hemisphere since 1976.
Chevron was fined 50 million reais ($27 million) by Brazilian environmental authorities for the Nov. 7 spill in deep waters off the coast of Rio de Janeiro. It will be fined for falsifying information to ANP and for failing to meet a plan to counter the accident, the regulator said yesterday.

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