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Brazilian prosecutors file criminal charges against Chevron, Transocean execs

(Editors note: This story was updated Mar. 22, adding Transocean statement)

Brazilian federal prosecutors filed criminal indictments against Chevron Corp., drilling contractor Transocean Ltd., and a total of 17 executives from both companies citing “crimes against the environment” regarding a seep last year from Frade oil field offshore Brazil.

Details on the exact charges were not immediately available. A Brazilian judge on Mar. 16 banned a group of Chevron and Transocean executives from leaving the country. Before the travel ban was announced, Chevron reported a new seep and oil sheen from the field.

Last year, Chevron sealed an appraisal well after a November oil seep from the field in 3,800 ft of water 370 km northeast of Rio de Janeiro in the Campos basin. The 2011 seep was stopped within 4 days, Chevron said.

Following the new seep, Chevron said it wants to study the “geological complexity” of the area. Chevron Brazil Upstream Frade asked Brazil’s National Petroleum Agency (ANP) for authorization to temporarily suspend production at Frade field as a precaution.

Judge Vlamir Costa Magalhaes late Mar. 16 granted a travel ban for certain executives on the request of a federal prosecutor. The executives reportedly were told to turn in their passports.

Previously, federal prosecutors filed a civil lawsuit seeking about $11 billion in damages. Chevron has 51.74% interest in Frade field, which has been in production since 2009.

Chevron e-mailed OGJ on Mar. 21 calling the charges “outrageous and without merit.” The e-mail continued, “Once all the facts are fully examined, they will demonstrate that Chevron and its employees responded appropriately and responsibly to the incident.”

Kurt Glaubitz, a Chevron spokesman in San Ramon, Calif., said Chevron collaborated fully with the Brazilian government authorities. The company provided incident information and transported ANP officials, federal police officers, and other authorities to the field.

“There is no technical or factual evidence demonstrating any willful or negligent conduct by Chevron or its employees associated with the incident,” Glaubitz said. “We have sought to perform our operations in full compliance with Brazilian laws and industry practices and to comply with all applicable licenses and authorizations.”

Glaubitz said continuous monitoring of the incident area shows no environmental impact to marine life and no oil reached Brazil’s coast.

“No persons were harmed as a result of the incident, and there is no technical basis for assuming that there is any risk to human health,” he said.

Transocean spokesman Guy Cantwell said, “We strongly disagree with the indictments, they are without merit and we will vigorously defend our company, our people, our reputation, and our quality of services. Transocean acted responsibly, appropriately, and quickly, putting safety first.”

Cantwell added, “Transocean’s crew did exactly what they were trained to do. They always maintained control of the well and the rig’s equipment worked perfectly. Once all of the facts are fully examined, they will demonstrate that we performed to the highest standards.”

Ongoing monitoring indicates the recent seep has been reduced to intermittent droplets, the majority of which are being captured by specially built containment devices, Chevron said, adding that it is providing regular reports to Brazilian authorities. A sheen that developed after the Mar. 16 seep was estimated at 1 km or smaller. Chevron used mechanical dispersion in both incidents.

Contact Paula Dittrick at paulad@ogjonline.com.


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