Brazil Could Ban Chevron After Blowout and Oil Spill

RIO DE JANEIRO, Brazil, November 21, 2011 (ENS) – U.S. oil giant Chevron faces huge fines and may be banned from operating in Brazil, after the blowout of an oil well that left a slick of crude off Brazil’s southeastern coast 68 kilometers (42 miles) long. While the oil leak is occurring offshore of Rio de Janeiro, the oil is not threatening the coastline or Rio’s famous beaches; it is floating away from land.

Chevron said the company takes “full responsibility” for the incident, which began November 8, when a well blowout caused crude oil to seep up from at least seven cracks that opened in the ocean floor near the wellhead.

Haroldo Lima, director general of ANP, Brazil’s National Petroleum Agency, said Monday that the agency is preparing two fines for the company, one for the lack of proper equipment to stop the leak and the other for withholding information.

The company downplayed important information about the leak and “hid photographs showing the true proportion of the accident,” Lima told the Rio de Janeiro newspaper “O Globo.”

Oil leaks from a crack in the sea floor opened by Chevron’s oil well blowout offshore Rio, Brazil (ROV Image courtesy Chevron/ANP)

The leak is being monitored through satellite imagery, overflights by visual observation and filming underwater. By ANP calculations, an average of 330 barrels per day leaked for over a week in the period November 8-15. ANP has estimated that more than 110,000 gallons (3,492 barrels) of oil have spilled into the Atlantic Ocean.

According to Radarsat images, by November 14 the oil sheen covered an area of 160 square kilometers (62 square miles).

The appraisal well was drilled in the Chevron-operated Frade oil field located 370 kilometers (230 miles) offshore northeast of Rio de Janeiro in water depths of 1,200 meters (3,800 feet).

“Chevron takes full responsibility for this incident,” said Chevron Brazil country manager George Buck on Sunday. “We are committed to deploying resources until the sheen can no longer be detected.”

Buck could not estimate the total size of the oil spill, but said the ANP figure was “in the ballpark.”

Based in San Ramon, California, Chevron said Sunday that its subsidiary, Chevron Brasil Upstream Frade Ltda., continues to work with Brazilian government agencies to contain, reduce and eliminate the remaining oil.

Vessels work on oil spill containment while surveillance plane flies over the slick. (Photo courtesy ANP)

Chevron is also working with its drilling contractor, Transocean, on well plugging operations. All development well drilling in the field is suspended.

“Up to 18 vessels have been in rotating operation to support well plugging operations and sheen cleanup,” said Buck. “The vessels are using oil response methods approved by the Brazilian government, such as deployment of containment booms and surface skimming. At no time has sand or chemical dispersants been used in the process.”

ANP says the spill volume is diminishing. The comparison of the images captured by underwater remotely operated vehicle that have been collected by the ANP, shows that the buffering process, which began at dawn on November 15, has shown positive results, with substantial reduction of the leak, the agency said in a statement Sunday.

“Our emergency response teams are trained and prepared to address a potential spill incident,” said Buck. “The moment the seeps were first identified, we immediately activated our emergency response plan and began dispatching necessary resources to safely manage the situation. We moved quickly to begin plugging and cementing procedures to seal the source.”

“Our combined efforts greatly diminished the size of the sheen and stopped the source of the seep flow within only four days of first detection. We believe no new oil is seeping from the reservoir. Seep lines continue to drain in the form of droplets,” said Buck.

Explaining how the spill started, Buck said, “We were drilling toward a targeted reservoir and encountered an unexpected pressure spike or ‘kick.’ We believe the kick caused fluid to move into the wellbore and increased pressure opened a segment of the wellbore. Fluid then escaped to reach thin fissures and migrate to the ocean floor.”

“The well was safely shut in, following standard operating procedures,” Buck said. “All equipment performed as expected. A complete investigation is underway to understand the cause of the incident. Findings will be shared with Brazilian government agencies and Chevron’s global operations to prevent this from happening again.”

The Federal Police in Rio are conducting their own investigation. In addition, ANP, the Brazilian Institute of Environment and Renewable Natural Resources, IBAMA, and the Brazilian Navy are part of the Monitoring Group to review measures taken by Chevron Oil Brazil to contain the oil spill and mitigate its consequences.

The incident is expected to be costly for Chevron.

ANP, IBAMA, and the government of Rio state begin today to assess the amount of fines that will be applied to Chevron. Together, the claims for compensation and fines could top US$100 million, according to a report in the newspaper “Estado de Sao Paulo.”

Copyright Environment News Service (ENS) 2011. All rights reserved.