ANP: Chevron Unprepared to Fulfill Emergency Plan

RIO DE JANEIRO (Dow Jones Newswires), Nov. 21, 2011

The Brazilian unit of U.S. oil major Chevron was not prepared to carry out the emergency plan approved by local oil regulators during the recent spill at the company's offshore Frade field, the president of Brazil's National Petroleum Agency, or ANP, said Monday.

"We approved an emergency plan, and they were not prepared for this type of emergency plan," said Haroldo Lima, president of Brazil's primary regulator for the oil and natural gas industry. Specifically, Chevron was not ready to cement the well that was the primary source of the leaking oil, something that ANP demands, Lima said.

Chevron will face at least three "notices of infraction," including one for the ill-prepared emergency plan, Lima said. The notices will be issued Monday by the ANP, and will not substitute for a larger infraction or penalty at a later date, he added.

The ANP is monitoring 28 points along nine fissures that leaked oil, with only one of the 28 leaking "residual" oil, Lima said. While the ANP considers the oil spill under control, Lima said because some of the monitoring sides still had drops of oil, the regulator did not consider the seepage "completely controlled."

The latest estimate for the oil spill pegs the volume of oil that leaked into the Atlantic Ocean off Brazil's coast at 3,000 barrels of crude over eight days, Lima said. The total area affected by the spill is estimated at 160 square kilometers.

Chevron could face a maximum fine of 50 million Brazilian reais, or about $28 million, from the ANP for its role in the oil spill, Lima said. But the total does not include any fines from environmental regulators or other agencies. "It's safe to say that this will generate a heavy fine for who caused the problem," Lima said, adding that the calculation of possible fines will take some time.

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


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Texan in Sumatra | Dec. 8, 2011
As a second comment, political blustering aside, it only took them FOUR DAYS to stop the flow, and less than that to start the containment efforts. So, besides politicians, how can anyone claim they were "unprepared" to implement the ERP? FYI: They are 99 miles offshore, so it probably took a day to load the boats with enough cement and half the next day to get it out to the rig and blow it onboard so they could use it. A couple of days to properly plan and execute the job (so that it was done right the first time (which it was), instead of screwing it up and making it harder to fix) is laudable, not cause for condemnation.

Texan In Sumatra | Dec. 8, 2011
Emmeline: Please do yourself a little research on the Internet regarding the "Petrobras has been exploring in Brazil for years and years and never had a spill like this....." You're right, their own record is worst. In point of fact - and according to their own numbers - they spilled a total of more than 4000 bbls during 2010.

Emmeline | Nov. 26, 2011
Forrest A Brown, you probably haven't seen the fishing boat that hang around the rigs in Brazil. Most of those people don't even know their rights or have the money to start a law suit. Plus, Brazilians are not known for taking advantage of situations to sue for anything. And the estimated fine is of about 28 million, which probably makes Chevron laugh at it. Considering Petrobras has been exploring in Brazil for years and years and never had a spill like this, this should be taken very seriously.

Leticia Allen | Nov. 22, 2011
I think it was absurd TransOcean let others do their job and Petrobras confirms.

Forrest A Brown | Nov. 21, 2011
Yes and with it being a U.S. company you can bet the IBAMA will be so over the top on the fine and clean up one hundred million will be cheep. You will see all the fishing boats sue for lost income and get it and any other person who may get a glob of oil on them will say it made them sick. then of course it is moving south by east so any other country in its path will have a go at Chevron. watch and see

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