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Chevron Hasn’t Been Notified of Fines By Brazil Government

Nov. 21 (Bloomberg) -- Chevron Corp., operator of the $3.6 billion Frade oilfield off the Brazilian coast, said it hasn’t received any notices of fines or other penalties from Brazil’s government stemming from a subsea crude leak.

Chevron is investigating the cause of the leak from cracks in the sea floor near an appraisal well, Scott Walker, a spokesman for the San Ramon, California-based company, said today in an e-mailed statement. The results of the probe will be turned over to Brazilian authorities, he said in the statement.

Chevron will be fined 50 million reais ($28 million) for environmental violations associated with the leaks first spotted about two weeks ago, Brazilian regulators said today. The company may lose the right to drill in Brazil’s deep-water oil region and could face another 100 million reais in fines, Haroldo Lima, the head of the country’s oil agency, said today during a meeting with reporters in Sao Paulo.

Chevron may also be penalized for withholding information from the government and editing video footage of the leaks before turning it over, said Magda Chambriard, a director of Brazil’s oil regulator, known as ANP.

The sheen on the sea surface has been reduced to 18 barrels, Walker said. Chevron estimated the entire volume of the leak at 2,400 barrels of oil.

“We are committed to deploying resources until the sheen can no longer be detected,” the company said in the statement.

Transocean’s Role

Chevron is the third-largest oil producer in Brazil, behind state-controlled Petroleo Brasileiro SA and Royal Dutch Shell Plc. Frade was Brazil’s eighth most productive field in September with 75,000 barrels a day of oil production, according to the website of the country’s oil regulator.

Transocean Ltd., owner of the rig under lease to Chevron at the time of the leak, may also face a ban in water adjacent to Rio de Janaeiro, Carlos Minc, environment secretary for Rio state, said today.

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.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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