Brazil: Another Fine for Chevron Regarding the Frade Oil Spill

Brazilian Institute of Environment and Renewable Natural Resources last week fined Chevron, operator of the Frade Field situated off the coast of Rio de Janeiro, with $5.4 million penalty for breaching its environmental permit.

IBAMA said that the analysis showed Chevron’s failure to comply with the Individual Emergency plan approved in environmental licensing of the project. IBAMA detected the lack of emergency equipment on Chevron’s vessels and highlighted delays in initial care of the leak.

This is the second fine for Chevron regarding the Frade oil spill accident. Brazilian government slapped the U.S. oil giant with $28 million fine in November.

Chevron to pay USD 10.6 Billion ?

But both of the fines could prove to be insignificant when compared to the giant lawsuit Chevron and Transocean are facing. The Federal Prosecutor​ in December asked the Federal Court to order Chevron and Transocean to pay a compensation of $10.6 billion for environmental damages made by the spill accusing the companies of not being able to control the damage caused by the spill, and also for the lack of planning and environmental management.

Transocean, the owner of the rig involved in the incident is looking for a way out of the situation saying on its website that “Transocean’s drilling services contract with Chevron for the SEDCO 706 requires Chevron, among other things, to indemnify Transocean for pollution or contamination based claims arising below the surface of the water.”

Chevron estimated that 2,400 barrels (381,600 liters) spilled into the ocean, Campos Basin.

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Offshore Energy Today Staff, December 27, 2011; Image: Chevron