Brazil suspends Chevron's drilling, fines $27.6 million for causing oil spill
24 November 2011
The Brazilian government has fined Chevron Corp $27.6 million and temporarily suspended all its drilling activities in the country, after the US oil major admitted it caused an oil spill off the coast of Rio de Janeiro.
Brazil's oil and gas regulator National Oil Agency (ANP) has also threatened to impose two additional fines of $28 million each on the San Ramon, California-based company for releasing "false information" and for not having adequate equipment to contain the spill that released almost 3,000 barrels of oil into the sea earlier this month.
Chevron is the third-largest oil producer in Brazil after state-owned Petrobras and Royal Dutch Shell.
In its most severe response to the spill so far, ANP has suspended Chevron's drilling in the Frade field in the oil-rich Campos basin where its well leaked and the order will remain in effect until the regulator identifies the causes and those responsible for the oil spill, and until safe conditions are re-established.
ANP has also suspended Chevron's drilling contractor Transocean, one of the company that was hauled by the US government for causing the Gulf of Mexico oil spill last year.
The $27.6-million fine, which was imposed by Brazil's Institute of the Environment and Renewable Natural Resources (IBAM) is the maximum allowed under current Brazilian law that dates back to 1998, according to institute chairman Curt Trennepohl.