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Chevron and Transocean settle over Brazil oil spill

17 September 2013

US energy giant Chevron and Swiss-based rig operator Transocean signed a deal with Brazilian prosecutors on September 13 to settle lawsuits over an oil spill off the country's coast. Chevron has agreed to pay $41.6m in compensation over the leak of 3,500 barrels of crude in November 2011 from the deepwater Frade field, 370km northwest of Rio de Janeiro.

The deal requires Chevron to accept “unprecedented obligations” to prevent new incidents and provide compensation to end two civil lawsuits, the office said in a statement. Chevron and Transocean did not immediately comment on the agreement.

The deal was reached with the consent of Brazil’s National Oil Agency and the Brazilian Environmental Institute, but must be approved by a federal court.

The offshore field, which produces 60,000 barrels of oil a day, was operated by California-based Chevron and Transocean, which ran the offshore rigs. 

In March 2012, a second but much smaller leak was detected in the same area in the Campos basin, and Chevron voluntarily suspended its operations in Brazil. More than a year later, in April, Chevron was authorised to partially resume oil production in Brazil.

Chevron has already paid a 35m real (about $15m) fine for 24 violations stemming from the first leak. 

The Brazilian Environmental Institute imposed two separate fines in 2011 totalling some $14.6m  for environmental damage and failures in the company’s accident emergency plan.

A criminal suit against the companies for environmental crimes and damage to the national patrimony of just under $20 billion was dismissed in February. 

Brazil owns massive oil and gas reserves under a thick layer of salt in the Atlantic Ocean.

But the country needs millions of dollars in investments to explore the reserves, which could turn Latin America’s top economy into one of the biggest hydrocarbon producers in the world.

The first auction to explore the site’s Libra Field will take place on October 21. Libra is the largest oil reserve discovered in Brazil’s history and is believed to hold between eight billion and 12 billion barrels.

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