Brazil oil regulator: Chevron leak not "negligence"

Thu Mar 22, 2012 7:18pm EDT
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By Jeb Blount

BRASILIA (Reuters) - An oil spill off the Brazilian coast in November was not the result of negligence by Chevron or drill-rig operator Transocean, Brazil's oil regulator said on Thursday, providing a boost to the companies and their executives as they face criminal charges.

Silvio Jablonski, a senior official at oil regulator ANP, told a Senate hearing that the accident at the Frade oilfield was caused by mistakes and project errors, but that the agency's report on the spill would not use the word "negligence."

The hearing came one day after a Brazilian federal prosecutor filed criminal charges against U.S. oil company Chevron, Transocean and 17 of their employees.

Both companies have denied the charges, which carry prison terms of up to 31 years.

Chevron shares were down 2.3 percent on Thursday to $105.41. Transocean shares lost 2.87 percent.

The Chevron spill, which at 2,400 to 3,000 barrels amounted to less than 0.1 percent of BP's 4.6-million-barrel Gulf of Mexico disaster, never reached beaches and was quickly controlled.

Jablonski also said that the Frade field does not appear to have been irreparably damaged by the accident -- news that may help ease investor worries about the viability of the field.

The charges filed by the prosecutor on Wednesday include failure to realize protocols to contain the leak, failure to take steps to kill the well and stop the drilling process, failure to meet legal and contractual duties, and others.   Continued...

An aerial view is seen of oil that seeped off the coast of Rio de Janeiro, caused by a well drilled by Chevron at Frade, on the water in Campos Basin in Rio de Janeiro state November 18, 2011. REUTERS/Rogerio Santana/Handout