Chevron Takes Responsibility for Brazilian Oil Spill, May Face Fines

   on November 21 2011 10:11 AM

Chevron Corporation announced it is taking full responsibility for the oil leak that occurred off the coast of Rio de Janeiro two weeks ago.

Chevron takes full responsibility for this incident, said George Buck, Chevron Brazil country manager, in an official statement released Sunday night. We are committed to deploying resources until the sheen can no longer be detected.

Fabio Frederico, press secretary with Brazil's U.S. embassy, said Brazil's environmental protection agency is looking into possibly imposing a $50 million Real (USD $27,624,300) fine on Chevron for the leak. Brazil's petroleum authority is investigating the leak, and could issue its own fine totaling at least $16 million. At some future point, Rio's local government could impose environmental reparations of its own, Federico said.

At least 18 vessels are working around the clock to clean up the oil sheen from the surface of the water. The company assessed the sheen at 18 barrels of oil, according to Chevron's statement.

Chevron is calculating the total volume of oil seeped into the South Atlantic since the leak was first reported Nov. 8, and said it should know within several days.

Brazil's National Petroleum Agency said 5,000 to 8,000 barrels of oil were leaked after an appraisal well cracked the ocean floor.

We were drilling toward a targeted reservoir and encountered an unexpected pressure spike or kick, Buck said.

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. All equipment performed as expected.

On Nov. 15, the company announced it had plugged the well and that the flow of oil has been significantly reduced. An investigation into the leak is underway.

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, Buck said. We believe no new oil is seeping from the reservoir. Seep lines continue to drain in the form of droplets.

Chevron Brazil was drilling in its Frade field several hundred miles offshore to the North East of Rio de Janeiro. The sheen of oil is roughly 70 miles away from the coast but traveling east away from the shore.

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