Chevron May Have to Pay $84 Million to Rio for Spill Damage
Chevron Corp. (CVX), the second-largest U.S. crude producer after Exxon Mobil Corp. (XOM), may be ordered to pay at least 150 million reais ($84 million) to Rio de Janeiro state for environmental damage from an offshore oil spill.
The state plans to file a lawsuit seeking the damage payments by Dec. 13, Carlos Minc, Rio’s environment secretary, told reporters in the namesake state capital today. Chevron’s operations in the Campos Basin off Rio’s coast will be monitored for two years through satellites, helicopters and vessels and it will also have to pay for an environmental audit, Minc said.
Chevron will have 150 days to deliver the audit results and other oil companies will have to carry out similar reviews of their operations to help prevent accidents, Minc said. The San Ramon, California-based company has come under increased scrutiny in Brazil after at least 2,400 barrels of oil leaked from its Frade project in deep waters off Rio’s coast last month.
Brazil’s federal environmental agency, known as IBAMA, fined Chevron 50 million reais last month. The country’s oil regulator prohibited Chevron from drilling any new wells for at least three months while it probes the spill.
Other Fines
The oil regulator, known as ANP, said last month it may fine Chevron as much as 50 million reais for each violation related to the incident. The company only provided partial video clips of the leak, didn’t report the presence of hydrogen sulfide in a well and didn’t meet requirements in a plan to cement and abandon the well that caused the leak, ANP Director Magda Chambriard said Dec. 1.
Chevron was only able to provide segments of the video due to the size of the data coming from a remote area and is conducting tests to make sure it meets the regulator’s requirements for cementing the well that leaked, spokesman Scott Walker said in an e-mailed response to questions yesterday.
The company reacted responsibly and will continue to cooperate with the Brazilian authorities to determine the cause of the incident, it said in an e-mailed statement today.
“We value our relationship with Brazil and look forward to being a partner with the country in developing its potential as an energy superpower,” Chevron said.
The total volume of oil on the surface of the ocean has been reduced to less than one barrel following cleanup efforts, Chevron said.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
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