Brazilian Federal Police Seek Indictments over Frade Oil Spill

Brazilian federal police on Thursday recommended that Chevron and Transocean officials involved in the Frade oil spill offshore Brazil be indicted for allegedly committing environmental crimes and withholding information in an investigation, according to newswire reports.

The indictment is unrelated to a civil suit brought against the companies by a public prosecutor on Dec. 14 seeking $11 billion in fines for the 3,000-barrel spill.

Chevron's Brazil director, George Buck, and as many as 17 Chevron and Transocean employees could be prosecuted, The Wall Street Journal reported. Brazilian’s federal prosecutor also ordered Chevron to halt drilling operations in Brazil, and some Brazilian politicians and have talked about expelling Chevron from Brazil.

Chevron said on Thursday that it believes plans by Brazilian federal police to indict Chevron employees in the Frade oil spill are “without merit” and that the company would “vigorously defend” its employees, Reuters reported.

Drilling rig contractor Transocean also has said it acted appropriately and responsibly to the oil spill and that the indictments were groundless.

The crimes allegedly committed by the companies carry jail term sentences of more than 10 years, Reuters reported, but experts say it’s unlikely any employees would spend time in jail.

The spill, which occurred offshore Rio de Janeiro, never reached Brazilian beaches.

Chevron and some Brazilian oil executives have said Brazilian authorities have overreacted to the spill, which was much smaller than the Macondo oil spill in 2010 and spills at installations run by Petrobras, which dumped several hundred thousand barrels into the sea.

According to media reports, potential criminal prosecutions and threats of expulsion could drive away potential oil partners as Brazil seeks to tap its pre-salt oil reserves in Brazil’s ultra-deepwater.


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