Brazil Slaps Chevron with New Oil Spill Fine

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Brazil (Dow Jones Newswires), Dec. 24, 2011

Brazil's Environment Institute on Friday ordered U.S. oil giant Chevron Corp. (CVX) to pay another fine related to the early November oil spill off the coast of Rio de Janeiro.

The agency, known as Ibama, ordered Chevron to pay $5.4 million for flaws in the company's emergency plan. Ibama earlier fined Chevron $28 million for environmental damages caused by the spill.

The agency said it discovered an "absence of equipment in the emergency vessels and a delay in the first response to the spill," the statement read.

Prosecutors previously announced legal action against Chevron, its Brazilian unit and Transocean, seeking $11 billion over the spill last month at a production well at the Frade field, 370 kilometers off Rio de Janeiro state. The well is located 1,200 meters below the ocean surface.

The state-run National Petroleum Agency estimated that some 3,000 barrels of crude were spilled.

Authorities suspended all of Chevron's drilling operations on Nov. 23 and denied it access to huge new offshore fields, which Brazil's national petroleum agency says have reserves that could surpass 100 billion barrels of high-quality recoverable oil.

Copyright (c) 2011 Dow Jones & Company, Inc.

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