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Chevron Sued for Another $11 Billion on Brazil Oil Spill

Published: April 4, 2012 | 7:56 am
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Chevron Corp. (CVX) and Transocean Ltd. (RIG) are being sued for another 20 billion reais ($11 billion) by a Brazilian federal prosecutor in a new lawsuit over a second oil spill at the Frade field off the nation’s coast.
Chevron committed “a series of errors” that led to the March spill at the project, the federal prosecutor’s office said in an e-mailed statement yesterday. Prosecutor Eduardo Santos de Oliveira is also seeking to halt operations at Frade and block Chevron from transferring profits from Brazil, according to the statement.
“The oil spill at the Frade field hasn’t been contained,” Oliveira said in the statement. “The damages to the environment and to Brazil’s natural resources are incalculable at this point,” he added.
The prosecutor filed the first 20 billion-reais lawsuit last year against San Ramon, California-based Chevron after a 3,000-barrel spill in November. Oliveira also filed criminal charges against Chevron and Transocean executives last month, seeking penalties of as much as 31 years in prison for environmental crimes.
A drilling accident caused the November spill after Chevron underestimated the amount of pressure at a reservoir where it was drilling, causing oil to leak from the well to fissures on the seabed.
In March, Chevron reported new leaks on the seabed at the project.

Chevron Responds

“Chevron will vigorously defend the company and its employees,” Kurt Glaubitz, a spokesman, said in an e-mailed statement yesterday. He called the charges “outrageous” and “without merit.”
“The 20 billion real figure in both civil lawsuits is arbitrary and has no legal and factual basis,” Glaubitz said.
Transocean, which operated the drilling rig at Frade, “acted responsibly, appropriately and quickly, putting safety first,” Guy Cantwell, a spokesman for the Vernier, Switzerland- based company, said in an e-mail yesterday. The crew “always maintained control of the well and the rig’s equipment worked perfectly.”
Oliveira also started a probe into the work by Brazil’s federal environmental agency Ibama and oil regulator ANP to monitor companies that explore oil in the country’s offshore fields, according to the same statement.
The prosecutor will also investigate emergency and accident prevention plans at all platforms operating in Brazil’s Campos Basin, according to the statement.

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