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Chevron to be fined over Brazil spill

November 23, 2011|Bloomberg News

Brazil's oil regulator said it will fine Chevron Corp. for falsifying information about a spill in deep waters off the coast of Rio de Janeiro and for failing to meet a plan to counter the accident.

The value of the fines for the two violations will be set after the end of a probe into the leak, the regulator, known as ANP, said Tuesday. The environment agency, which fined Chevron 50 million reais ($28 million) on Monday, and the Brazilian Navy are also investigating the spill, ANP said.

The leak, which started Nov. 7 in Chevron's $3.6 billion Frade project in the Campos Basin, may lead to tighter regulations for oil producers, which could affect Brazil's output target, according to Erasto Almeida, a analyst at New York-based research company Eurasia Group.

The primary source of the Chevron spill has been blocked and its size has been reduced to less than a square mile, ANP said.

Chevron edited video images that should have been made available in their entirety to Brazil's oil regulator, ANP Director Magda Chambriard said. Each violation may cost Chevron as much as 50 million reais in penalties, said Haroldo Lima, head of the ANP.

"The moment the seeps were first identified, we immediately activated our emergency response plan and began dispatching necessary resources to safely manage the situation," said Lloyd Avram, a spokesman for San Ramon, Calif.-based Chevron said.

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