Petrobras faces big tab, shake-up after spill

Feb. 14, 2000
Petroleo Brasileiro SA (Petrobras) estimates it will spend about 110 million Brazilian real ($62 million) in costs directly related to a January fuel oil spill said to be the worst in Brazil's history.

Petroleo Brasileiro SA (Petrobras) estimates it will spend about 110 million Brazilian real ($62 million) in costs directly related to a January fuel oil spill said to be the worst in Brazil's history.

Petrobras has already paid out about 360,381 real to support displaced communities after a ruptured pipeline from the company's Reduc refinery at Rio de Janeiro dumped about 1.3 million l. (about 117,000 bbl) of fuel oil into Rio de Janeiro's scenic Guanabara Bay.

The direct assistance was offered to local residents, mostly fishermen, who suffered financial losses as a result of the oil spill. Shortly after the incident was publicized in late January, Petrobras opened a number of community outreach centers to register and offer food and medical assistance to local populations disrupted by the spill.

Fines

Beyond these costs, the Brazilian Institute for Environmental and Renewable Natural Resources (IBAMA) slapped a 51.05 million real fine on Petrobras. Petrobras President Henri Phillipe Reichstul said that the company will participate in the recovery efforts and will pay the fine. The money from the fine will be used by IBAMA and the environmental ministry to restore the bay's ecosystem, particularly the mangrove swamps and fish hatcheries that were severely damaged.

IBAMA will impose further fines on Petrobras, of 1,500 real/hectare of marshlands that were destroyed. Mario Moscatelli, a biologist and IBAMA's Rio de Janeiro state manager for the preservation of mangrove swamps, said that he considers the amount of the fine ridiculous and will ask IBAMA to review the fine upwards.

The spill started on Jan 18; at first, Petrobras officials said that only 500,000 l. had been spilled. Reichstul later acknowledged that the company had underestimated the size of the spill. The oil slick spread through the Guapimirim mangrove swamp, a protected area and an important spawning ground for fish, birds, and crustaceans.

As the spill widened over 40 sq km, hundreds of workers with rakes and pitchforks tried to clean the beaches of Mage and other hard-hit areas. They mopped up the oil with hay and dumped it into steel drums, while biologists washed off oil-blackened birds and crabs.

Reichstul said, without further clarification, that poor pipeline design and faulty software-that allowed the accident to go unnoticed for several hours-were to blame for the spill. He also said that, so far, about 450,000 l. of heavy fuel oil have been recovered.

Environmental policy review

Rodolfo Landim, Petrobras exploration and production superintendent, will be temporarily in charge of the clean-up operations. He has also been ordered to oversee a complete review of the company's environmental standards.

Two top Petrobras officials in charge of the company's environmental department were fired, and Reichstul said that, from now on, environmental responsibilities will be directly linked to the president's office. Petrobras reportedly invests 200 million real/year for environmental protection. The firm is preparing an explanatory dossier for national and foreign investors on the spill's aftermath.

The environment ministry said that, of the 11 Petrobras refineries, 6 (including Reduc) are operating without environmental licenses. The federal government and enviromental authorities said that this was the worst oil spill in Brazil's history.