Chevron officials to face charges in Brazil oil spill

Brazilian prosecutors plan to file criminal charges against Chevron officials for November’s oil spill off the coast of Rio de Janeiro state. Brazilian officials charge that Chevron acted irresponsibly at the Frade oil field in the Campos Basin formation. Up to 12 Chevron officials are expected to be indicted. The filing in federal court in Campos, Brazil, will likely include a request for criminal indictment of George Buck, chief executive of Chevron’s Brazil unit, as well as other staff, officials told Reuters. Chevron also faces a $11 billion civil suit over the spill.

Transocean Ltd, whose rig was used in the operation, and some of its employees in Brazil are also expected to be charged, according to the officials, who spoke on condition of anonymity. Last month, a Federal Police investigator submitted a report saying Chevron and Transocean took “unacceptable” risks in the operation, and recommended that 17 individuals be indicted. As many as 12 of those are from Chevron, according to legal documents reviewed by Reuters.

Chevron and the Brazilian government are at odds over the extent and impact of the spill. Chevron puts the leak at 2,400-barrels, while prosecutors estimate it was closer to 3,000 barrels. It has not yet been contained, with oil still seeping from the ocean floor. However, oil from the leak has not reached shore, and was less than 0.1% of BP’s 4.9 million-barrel Gulf of Mexico spill in 2010. The Frade leak was also much smaller than several previous spills in Brazil by the state company Petrobras. Nonetheless, Brazil’s National Petroleum Agency (ANP) has suspended Chevron’s drilling license at Frade. The ANP and Brazil’s environmental protection agency IBAMA have fined Chevron more than $50 million for the spill.

Petrobras owns 30% of Frade, with Chevron owning 52% and holding responsible for field management. The remainder is owned by Frade Japao, a unit of Japan’s Inpex. Brazil claims at least 15 billion barrels of deepwater discoveries since 2007, and the government is seeking to extend control over production, mandating a 30% Petrobras share in all future offshore projects. (Reuters, Jurist, Jan. 27)

See our last posts on Brazil and the politics of oil spills.