Brazil Suspends Chevron from Drilling in Brazil Following Oil Leak

 
on November 23 2011 5:06 PM

Brazil's national petroleum authority (ANP) announced today it is suspending U.S. oil giant Chevron's drilling rights in the country's territorial waters.

Brazilian officials said the moratorium on Chevron will stay in place until the company can further explain and correct the conditions that led to the oil leak earlier this month.

Chevron will follow all the rules and regulations of the Government of Brazil and its agencies, said company spokesperson Scott Walker. Walker was not able to provide details by press time.

Brazil's ANP also denied Chevron's request to explore for oil under a salt formation in ultra-deep water, which holds enormous amounts of oil, according to a Reuters report Wednesday.

Chevron, which is facing considerable backlash in the country following the leak, already faces a $28 million fine for environmental damages and could face more.

Late Tuesday, Chevron announced it released 2,400 gallons of oil from a fissure in the ocean ground. The fissure was caused when an appraisal well ran into unexpected pressure and caused the ocean floor to crack.

For about 5 days, the leak ran unchecked before the company plugged the well on Nov. 13. The well was cemented shut Nov. 16. The leak was first suspected when oil on the surface of the water was noticed the evening of Nov. 8, one day after the company experienced the spike in pressure.

The leak was located about 230 miles off the coast of Rio de Janeiro, and crews are continuing their cleanup of the ocean surface.

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