Brazil to Probe Oil Contracts between Chevron and Petrobras in Frade Field Following Oil Leak

 
on November 24 2011 2:37 PM

Brazil's federal audit court wants to investigate the contracts between Chevron and Brazil's state-owned oil company Petroleo Brasiliero regarding the Frade offshore oil region to the northeast of the country where Chevron operates with Petrobras, reported the Associated Press.

The announcement follows an oil leak, discovered earlier this month, that revealed 2,400 barrels of oil were leaked into the ocean. That figure is based on latest estimates provided by Chevron.

Brazil's petroleum authority (ANP) announced Wednesday that it was temporarily suspending Chevron's drilling contracts pending further investigation into the cause of the leak. A statement on ANP's website alleged negligence on the part of Chevron in drilling the well.

Chevron, which was fined $28 million for environmental damages over the leak, has expressed its willingness to cooperate with Brazilian officials in the investigation.

The company said late Wednesday that while its Brazil subsidiary Chevron Brasil Upstream Frade Ltda has not received an official notice from Brazil authorities on the drilling suspension, it has voluntarily suspended its current and future drilling operations off the coast of Brazil for an indefinite period.

Chevron also noted that its decision to suspend its drilling operations has no impact on its current production in the Frade field, or on other Frade field operations, which has an estimated output of 36,000 barrels per day.

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