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Brazil oil spill criminal charges add lengthy prison terms to $11bn civil suit against Chevron and Transocean

27 March 2012

On March 21 a Brazilian federal prosecutor filed criminal charges against Chevron, Transocean and 17 of their employees after an oil leak in the Frade field, 370km off the coast of Rio de Janeiro. Both companies have denied the charges, which carry prison terms of up to 31 years.

Oilfield support vessels spray dispersant on the surface oil leaking from the ocean floor
Oilfield support vessels spray dispersant on the surface oil leaking from the ocean floor

A $11 billion civil suit against oil major Chevron and rig operator Transocean was filed after the leak in November 2011.

The spill, which at 2,400 to 3,000 barrels amounted to less than 0.1% of BP's 4.6-million-barrel Gulf of Mexico disaster, never reached beaches and was quickly controlled.

And Brazil's oil regulator said on March 22 the spill was not the result of negligence by Chevron or Transocean, providing a boost to the companies and their executives.
Silvio Jablonski, a senior official at oil regulator ANP, told a Senate hearing that the accident at the Frade oilfield was caused by mistakes and project errors, but that the agency's report on the spill would not use the word "negligence", and that the field does not appear to have been irreparably damaged by the accident.

The charges filed by the prosecutor on Wednesday include failure to realise protocols to contain the leak, failure to take steps to kill the well and stop the drilling process, failure to meet legal and contractual duties, and others.

Senators from Brazilian President Dilma Rousseff's party have said the charges create a climate of insecurity that could damage vital investment in the oil sector.

Rousseff, a former energy minister who sat on the board of state-run oil company Petrobras, has remained mostly silent about the Chevron case. She has warned that foreign companies in the oil sector need to respect Brazilian regulations, but has refrained from criticising the Chevron executives or the company in public.

Meanwhile, a judge in Campos could shift the criminal charges filed against Chevron and Transocean to Rio de Janeiro, a decision that would remove crusading prosecutor Eduardo Santos de Oliveira from the case.

Federal judge Claudio Girão Barreto will consider whether the companies must post bonds in Campos or whether the case should be moved to Rio de Janeiro, which could delay any formal criminal indictment of the firms and their employees for weeks. If the case is transferred, a different prosecution team might change or alleviate the charges. 

On March 21, Chevron issued the following statement:

"These charges are outrageous and without merit. Once all the facts are fully examined, they will demonstrate that Chevron and its employees responded appropriately and responsibly to the incident. Chevron will vigorously defend the company and its employees.

"Chevron has collaborated transparently and completely with all the appropriate Brazilian government authorities. This has included providing relevant information on the incident and timely transportation to the incident site for several National Petroleum Agency officials, federal police officers and other authorities.

"There is no technical or factual evidence demonstrating any willful or negligent conduct by Chevron or its employees associated with the incident. We have sought to perform our operations in full compliance with Brazilian laws and industry practices and to comply with all applicable licenses and authorizations.”

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