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Brazil seeks $22 billion from Chevron and Transocean in oil spill

April 05, 2012|Bloomberg News

Chevron Corp. and Transocean Ltd. are being sued for $22 billion in environmental damages in Brazil, double the initial claims, after a federal prosecutor filed a lawsuit over a second oil spill off the nation's coast.

Chevron committed "a series of errors" that led to the March spill at the Frade project, the federal prosecutors' office said. Prosecutor Eduardo Santos de Oliveira is also seeking to halt operations at the project and block the San Ramon, Calif., oil giant from transferring profits from Brazil.

"The oil spill at the Frade field hasn't been contained," Oliveira said. "The damages to the environment and to Brazil's natural resources are incalculable at this point."

A leak of 3,000 barrels of crude into the Atlantic Ocean off Rio de Janeiro's coast in November and a seep in March have led to a slew of probes against Chevron and Transocean, which operated the rig at Frade. Oliveira filed the first $11-billion lawsuit last year and pressed criminal charges against executives of the two companies last month, seeking penalties of as much as 31 years in prison.

A drilling accident caused the November spill after Chevron underestimated the amount of pressure at a reservoir, causing oil to leak from the well to fissures on the seabed.

In March, Chevron reported new leaks on the seabed at the project. Chevron said last month that about a barrel of oil leaked from the seabed that month. Chevron is collecting the oil in underwater traps and the incident hasn't damaged marine life, the company said.

"Chevron will vigorously defend the company and its employees," Chevron spokesman Kurt Glaubitz said. He called the charges "outrageous" and "without merit."

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