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Chevron Delays Brazil Wells as Government Probes Offshore Spill

Chevron Corp. (CVX), the third-largest oil producer in Brazil, has delayed three wells at the offshore Frade project while it waits for the government to lift a drilling ban following an oil spill earlier this month.

Chevron put on hold plans to develop the water injection wells at Frade after the Brazilian oil regulator’s Nov. 23 ban on the company’s drilling, Ali Moshiri, head of operations in Latin America and Africa, said in a telephone interview from Houston yesterday. Water injection wells help to maintain reservoir pressure and separate water from oil at other wells.

As many as 3,000 barrels of oil were leaked during the Nov. 7 spill, according to the regulator, which suspended Chevron’s drilling in the country until a probe into the leak is completed. San Ramon, California-based Chevron is cooperating with authorities to investigate the causes of the spill and still plans to invest $3 billion in existing projects in Brazil and expand when the country offers new areas, Moshiri said.

“We’re hoping it won’t last very long, because I’m not quite sure why it was suspended in the first place,” Moshiri said. “Not even one drop has reached the beach, a reaction of this magnitudes is really surprising.”

The two largest oil producers in Brazil are state- controlled Petroleo Brasileiro SA (PETR4) and Royal Dutch Shell Plc. (RDSA) Brazil plans to double oil production in the next ten years as it taps the largest discoveries in the Western Hemisphere in over 30 years that are located in deep waters of the Atlantic Ocean.

To contact the reporters on this story: Rodrigo Orihuela in Rio de Janeiro at; Peter Millard in Rio de Janeiro at

To contact the editor responsible for this story: Dale Crofts at

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