Brazil Chevron oil leak charges to focus on safety

Mon Mar 19, 2012 6:23pm EDT
 
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By Jeb Blount

RIO DE JANEIRO (Reuters) - A Brazilian prosecutor plans to allege this week that Chevron and Transocean should not have drilled a deep-water well that leaked in November, legal documents showed, giving a glimpse into expected criminal charges that could slow the rush to develop Brazil's vast offshore oil wealth.

The allegations are part of police and prosecutors' reports being used to assemble criminal indictments against oil company Chevron, drill-rig operator Transocean, and 17 of their executives and employees.

The documents, obtained by Reuters, provided the most detailed look yet at possible causes of the oil leak off Brazil's southern coast. They also outline why prosecutors are seeking criminal charges for what industry watchers note is a relatively small spill at a well that was approved for drilling by Brazilian regulators.

"We are in uncharted territory," said Cleveland Jones, a Brazilian oil geologist at the State University of Rio de Janeiro. "Do we want better environmental standards? Yes. Did the environment get really hurt? No. If you applied the same standards to the whole industry, you'd probably have to shut it down, and we aren't applying the same standards to others."

Authorities on Saturday ordered Chevron's Brazil chief George Buck and 16 others to surrender their passports and remain in the country. Criminal charges could be filed by Wednesday, a spokesman for the prosecutor said. A Brazilian judge will then determine whether to proceed with formal indictments.

The pending criminal case, along with a record $11 billion environmental lawsuit the prosecutor launched against Chevron in November, show heightened concern over the safety of Brazil's offshore oil boom in the wake of the 2010 BP oil disaster in the Gulf of Mexico.

The Chevron leak was less than 0.1 percent of BP's massive spill and no oil reached shore, raising concern from Chevron and others that the charges may be politically motivated or unfair.

Much larger and more damaging spills by Brazilian state-run energy giant Petrobras, which owns 30 percent of the Frade field operated by Chevron where the leak happened, have not led to criminal charges against Petrobras or its executives.   Continued...

 
In this handout image released by Chevron on March 19, 2012, containment equipment is pictured in the Frade Field, in the waters of the Campos Basin in Rio de Janeiro state. A Brazilian prosecutor plans to allege this week that Chevron and Transocean should not have drilled a deep-water well that leaked in November, legal documents showed, giving a glimpse into expected criminal charges that could slow the rush to develop Brazil's vast offshore oil wealth. The allegations are part of police and prosecutors' reports being used to assemble criminal indictments against oil company Chevron, drill-rig operator Transocean, and 17 of their executives and employees. REUTERS/Chevron/Handout