March 22, 2012 / 8:29 PM / 5 years ago

Brazil oil regulator: Chevron leak not "negligence"

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.Rogerio Santana/Handout

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.

An influential senator from President Dilma Rousseff's party criticized the charges as "excessive" and "irresponsible" in an interview prior to the hearing.

Senator Jorge Viana told Reuters the charges "create a climate of insecurity" that could damage badly needed investment in the oil sector.

If the charges, plus an $11 billion civil suit filed against Chevron and Transocean in November, were fairly applied to other polluters, "the industry would shut down," said Viana.

"Brazil is entering a phase in which we need investment from all over," said Viana.

Rousseff, a former energy minister who sat on the board of state-run oil company Petrobras, has remained mostly silent about the Chevron case. She has warned that foreign companies in the oil sector need to respect Brazilian regulations, but has refrained from demonizing the Chevron executives or the company in public.

Rousseff sees the case "as a legal issue, not a governmental one," a senior official told Reuters on Thursday. He spoke on condition of anonymity to be able to frankly describe her views on a sensitive matter.

Writing and additional reporting by Brian Winter; Editing by Alden Bentley and Jim Marshall

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