Chevron committed “a series of errors” that led to the March spill at the project, the federal prosecutor’s office said in an e-mailed statement today. Prosecutor Eduardo Santos is also seeking to halt operations at Frade and block Chevron from exporting profits from Brazil, according to the statement.

Santos filed the first 20 billion-reais lawsuit last year against San Ramon, California-based Chevron after a 3,000-barrel spill in November. Santos filed criminal charges against Chevron and Transocean executives last month, seeking penalties of as much as 31 years in prison for environmental crimes.

A drilling accident caused the November spill after Chevron underestimated the amount of pressure at a reservoir where it was drilling, 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 has halted production at Frade as a precautionary measure.

Chevron didn’t immediately respond to an e-mail and phone call seeking comment.

Transocean, which operated the drilling rig at Frade, “acted responsibly, appropriately and quickly, putting safety first,” Guy Cantwell, a spokesman for the Vernier, Switzerland- based company, said in an e-mail. The crew “always maintained control of the well and the rig’s equipment worked perfectly.”

Read Article

The federal watchdog’s comment strengthens calls from environmental groups, such as the Natural Resources Defense Council and Alaskan native people, that have been urging President Barack Obama’s administration to delay Arctic oil exploration.

Ice that floats on the surface or scrapes the seafloor may hinder the response to a spill late in the drilling period, which runs from July 15 through Oct. 31. A lack of personnel and equipment near a remote drilling site may slow containment and collection of spilled oil, the agency said in a report released today by the House Energy and Commerce Committee.

“Shell representatives told us that the company plans to have two concurrent drilling operations capable of providing mutual assistance,” the watchdog said. “But there are few additional resources available in the region to respond in the event that Shell’s capabilities are insufficient.”

While Shell won the approval of its oil-spill response plans, the Hague-based company has yet to obtain Interior Department permits to drill any wells in the Arctic seas that may hold as much as 26.6 billion barrels of oil.

Beaufort, Chukchi

Shell, preparing to drill in the region for five years after spending about $4 billion on Beaufort Sea and Chukchi Sea leases, plans to use equipment designed specifically for icy Arctic conditions.

“Our oil-spill response plan is second to none in the industry and we are proud of that,” Curtis Smith, a Shell spokesman, said today in an e-mail. “The recent approval of our Beaufort and Chukchi sea oil-spill response plans reinforces that our approach to Arctic exploration is aligned with the high standards the Department of Interior and the public expects.”

The GAO report is “one more powerful voice” in favor of delaying Arctic drilling, Chuck Clusen, director of national parks and Alaska projects at the New York-based Natural Resources Defense Council, said today in a phone interview. The NRDC joined Alaskan natives and other environmental groups in challenging the sale that gave Shell access to Arctic leases.

The Interior Department “conducted exhaustive reviews of the plans,” Nicholas Pardi, a spokesman, said today in an e- mail. The agency “continues to hold the operators accountable with additional exercises, reviews and inspections to ensure that all personnel and equipment are positioned and ready.”

Read Article

The case, brought by the FUP oil workers federation in federal court, raises the stakes for Chevron (CVX.N) and Transocean (RIGN.VX), which are already fighting criminal and civil charges in Brazil that could carry jail terms for their employees and damages of about $11 billion.

Chevron did not demonstrate environmentally responsible practices in its exploration and development of the Frade field in the Campos Basin off the coast of Rio de Janeiro, said FUP representative João Antonio Moraes. The union represents more than 300,000 workers in Brazil’s oil industry.

“Chevron lied to the Brazilian state,” Moraes told Reuters. “We’re seeking the cancellation of their concession in the field where their operations have shown to be predatory and environmentally unsound in their exploitation of resources.”

Kurt Glaubitz, Chevron’s spokesman in Rio, and Transocean spokesman Guy Cantwell in Houston had no immediate comment on the suit, which was filed over a spill in November that leaked an estimated 2,400 barrels of oil in the Atlantic.

The Chevron leak was less than 0.1 percent of the size of the 4 million-barrel BP (BP.L) oil disaster in the Gulf of Mexico in 2010. Transocean also owned the rig in that spill. Past Brazilian oil spills by Brazil’s state-run Petrobras (PETR4.SA), including some larger ones, have never prompted criminal charges.

Brazilian oil regulator ANP told a Senate hearing last Thursday that Chevron was not negligent in the drilling of the well that caused the spill, a finding that may help the company in its mounting legal battles in Brazil, one of the world’s most promising oil frontiers.

Read Article

After months of laboratory work, scientists say they can definitively finger oil from BP’s blown-out well as the culprit for the slow death of a once brightly colored deep-sea coral community in the Gulf of Mexico that is now brown and dull.

“It’s kind of a tangled web of impact,” he said.

Read Article

A unit of Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, was sued in Britain by 11,000 Nigerians who say their land, rivers and wetlands were spoiled by two “massive” spills in the Niger River delta in 2008.

The lawsuit against Shell’s Nigerian subsidiary was filed in London today by residents of the coastal Bodo community after talks failed to produce a deal, the group’s law firm Leigh Day & Co. said in a statement. While Shell admits liability for the leaks, it claims local people spilled most of the oil.

“The spills have caused extensive and long-lasting devastation to the claimant’s lands and fishing waters and have a profoundly detrimental impact on the life of the community,” the lawyer for the Nigerians, Martyn Day, said in court papers.

The lawsuit, claiming a leak of 500,000 barrels, comes two months after Nigerian President Goodluck Jonathan said he would seek compensation from Shell, based in The Hague, for the country’s worst offshore spill in more than a decade — a leak in December of nearly 40,000 barrels of oil at the company’s Bonga field off Nigeria’s coast.

Before and after the Bodo leaks, local people spilled oil during theft from the pipeline and sabotaged it to exaggerate the environmental damage, Shell spokesman Jonathan French said in a phone interview. The people have the “misguided belief that more oil spilled equals more compensation,” he said.

‘Lies and Deceit’

Patrick Naagbanton, who is from Bodo and runs a non- governmental organization dedicated to protection of the environment and human rights, said Shell makes the same claims of theft and sabotage whenever there’s a spill or explosion.

“I’m used to their lies and deceit,” Naagbanton, who now lives in nearby Port Harcourt, Nigeria, said in a phone call today. “This is what they say about a lot of communities in the Niger delta and beyond, wherever their facility has destroyed the environment of the local people.”

A joint team of Shell investigators and the Nigerian oil- spill regulator Nosdra visited the site and determined the total volume of oil spilled was about 4,000 barrels, French said. Lawyers for the townspeople said that amount was spilling from the pipeline nearly every day during one of the leaks that lasted two months.

“We clearly disagree with that assessment,” French said.

The two Bodo spills leaked oil onto 90 square kilometers of land, mangroves, creeks and streams and affected a coastline similar in size to that of BP Plc (BP/)’s Deepwater Horizon spill in the Gulf of Mexico in 2010, the law firm said. The human-rights group Amnesty International said in November that Shell should pay $1 billion to start cleaning the environment around Bodo.

35 Villages

The Bodo community has about 49,000 people in 35 villages and most of its people are subsistence fishermen and farmers, the law firm said. While Shell stopped oil extraction in the area in 1994, the company’s pipelines still traverse it, according to the complaint.

Shell continued pumping oil for weeks after learning of the spill, “causing increasing devastation to Bodo’s environment,” Day said in the statement. The pipeline should have been shut immediately, he said.

Shell was unable to shut the pipeline quickly because its workers were physically blocked by local people from entering the area, French said. Shell admitted liability in late 2008 and early 2009 — as soon as the company confirmed the two spills were caused by operational failings, he said.

The Bodo waterway at the center of the U.K. case recovered from a “minor” leak in 2003 and a larger spill in 1986, according to the complaint. The creek was “rich in fauna” and “essentially free of hydrocarbons” before the latest incidents, it said.

Nigeria, with daily production of 2.39 million barrels, was Africa’s largest oil producer last year, according to the country’s Petroleum Ministry. The west African nation is the fifth-biggest source of U.S. crude imports.

In a separate case, Shell asked the U.S. Supreme Court last month to rule the company can’t be sued by Nigerians seeking damages for torture and murders committed by the national government in the early 1990s.

Read Article

“There was a critical non-compliance,” Silvio Jablonski, an adviser to the board of the oil regulator known as ANP, told lawmakers at a hearing in Brasilia yesterday. “It’s possible to demand the operator be changed or the contract revoked.”

Chevron has come under mounting attack from Brazilian politicians, prosecutors and regulators following the leak at its $3.6 billion Frade project in November and a second seep this month. Federal Prosecutor Eduardo Santos, who’s probing the slick independently from the regulator, charged executives at Chevron and rig operator Transocean Ltd. (RIG) with environmental crimes and called for prison sentences of as many as 31 years.

There was no negligence at the company’s operations at Frade, Rafael Jaen Williamson, a corporate affairs director at the company, told reporters in Brasilia after the congressional hearing. Chevron has worked closely with regulators and hasn’t considered the possibility of a license suspension, he said.

“Chevron will vigorously defend the company and its employees,” Kurt Glaubitz, a spokesman, said in an e-mailed statement March 21, adding that the prosecutor charges are “outrageous.”

The leak occurred at a time Brazil is increasing scrutiny of deep-water drilling following the 2010 Macondo spill in the U.S. Gulf of Mexico. Both Chevron and Transocean said the charges are “without merit.”

“We strongly disagree with the indictment,” Transocean Corporate Communications Director Guy Cantwell said in an e- mail. “We will vigorously defend our company, our people, our reputation and our quality of services.”

Transocean Spared

The ANP didn’t include Transocean in its probe of the leak because there were “no problems” with its rig used at Frade, Magda Chambriard, the head of the agency, said yesterday. The regulator will complete its final report on the spill after Chevron responds to questions within 15 days and expects to take a month to study the replies, Chambriard said.

The prosecutor’s charges, which will be pursued in court, call for each company to pay 10 million reais ($5.5 million) and for each of 17 executives indicted in the case to pay 1 million reais.

George Buck, head of Chevron in Brazil, and Michael Legrand, Transocean’s head of operations in the country, are among the executives who were banned from leaving Brazil this week while the prosecutor’s probe is conducted.

‘Political Firestorm’

“This political firestorm is indicative of a post-Macondo world,” Christopher Garman, a Latin American analyst at Eurasia Group, said in a telephone interview. “This is the reality international oil companies have to deal with.”

Chevron, the second-biggest U.S. oil company by market value, suspended production in Brazil last week after identifying a second leak at the Frade area.

The oil seep near Chevron’s Frade project this month didn’t come from the field where a spill occurred in November, company spokesmanGlaubitz said in an e-mailed response to questions.

Chevron fell 2.4 percent to $105.35 in New York yesterday. Transocean dropped 2.8 percent to $55.20.

Read Article

Seeking approval to build the Trans Alaska Pipeline back in the 1970s, government and industry promised the people of America that oil would be shipped safely from Alaska, and “not one drop” would be spilled. There were to be double-hulled tankers, a fail-safe tanker monitoring system, state-of-the-art spill response capability, and of course, the government would keep a vigilant eye on industry. But after getting approval to build the pipeline, the big money began to flow and all such promises were promptly forgotten.

And at four minutes past midnight on March 24, 1989 — 23 years ago on Saturday — the single-hulled supertanker “Exxon Valdez,” loaded with 1.3 million barrels of toxic Alaska North Slope oil, ran hard aground on a well-marked reef in Alaska’s Prince William Sound, rupturing eight of its 11 oil cargo holds, and causing at the time the nation’s largest oil spill. So much for “not one drop.”

The Exxon Valdez disaster remains a tragic lesson in what can be lost with a few bad policy decisions and a few broken promises. In her book The Heart of the Sound, Alaska nature writer Marybeth Holleman says that those who experienced the Exxon Valdez first-hand are “repositories of human memory for an event that shouldn’t be forgotten.” The spill became an enduring symbol of recklessness, hubris, arrogance, complacency and outright dishonesty. It remains a cautionary tale for Arctic offshore drilling today.

Over 40,000 tons of toxic oil spilled into one of the world’s most productive, pristine, cold-water, coastal ecosystems. The oil eventually spread over 10,000 square miles of Alaska’s coastal ocean, 1,300 miles of spectacular shoreline, including national parks, wildlife refuges, wilderness areas, a national forest and ancestral lands of Alaska Natives. And the oil spread over 600 miles from the site of the grounding.

The spill occurred at a time of critical biological productivity along the Alaska coast — the spring plankton bloom had just begun, herring were moving inshore to spawn, seabirds and whales were returning, juvenile salmon were emerging from streams into nearshore waters, seals and sea otters were beginning to pup. The spill killed thousands of marine mammals, and hundreds of thousands of seabirds, and much of the intertidal zone. And there were long-term, chronic impacts to fish and wildlife — reproductive failures, deformities, reduced growth rates, altered feeding habits, organ damage, tumors, genetic damage and viral diseases. The Sound’s ecologically important herring population collapsed.

But body counts give only an abstract accounting of the devastating impact of the spill. Many of us watched in vain as sea otters shivered in oiled fur that once kept them warm; whales surfaced in oil which they then inhaled; birds struggled, sick and unable to fly; river otters crawled off to die under rocks; and thousands of juvenile salmon showed up dead in oil skimmers. The immediate, overwhelming sense of tragedy and loss was eloquently conveyed by Walter Meganack, a regional Alaska Native elder, who said in June that year:

“… what we see now is death. Death, not of each other but of the source of life — the water… It is too shocking to understand. Never in the millennium of our tradition have we thought it possible for the water to die. But it is true.”

And today, 23 years later, most of the fish and wildlife populations and habitats injured by the spill have yet to fully recover, and there is still residual, toxic oil in beach sediments. It is becoming evident that the injured Alaska coastal ecosystem may never fully recover from the Exxon Valdez spill.

What of the promised “state-of-the-art spill response”? Despite a three-year, $2 billion effort by Exxon, the response was a spectacular failure, recovering less than 7 percent of the spilled oil. And social, psychological, and economic impacts were unprecedented, and communities collapsed. Although Exxon promised coastal residents just after the spill that it would make them “whole,” instead the company fought their claims in court for 20 years, whittling down the jury award to just 10 percent of its original value. And today the government litigation continues. The government presented Exxon with its final demand for payment of $92 million over five years ago, Exxon has not paid it, the government has not tried to collect, and the parties continue to argue about it in court. This is the true legacy of “responsible oil development” in Alaska.

Now, fast forward to April 2, 2010, when President Obama announced a dramatic expansion of offshore drilling in U.S. waters, declaring that “oil rigs today generally don’t cause spills.” Three weeks later, the Deepwater Horizon exploded in the Gulf of Mexico, causing the largest offshore spill in history. As oil continued to wash ashore in the Gulf in August, he declared that “the vast majority of the oil appears to be gone.” Either the president is getting spectacularly bad advice or, more likely, he is simply repeating oil industry rhetoric to suit his fossil energy politics. And although few of the recommendations from the Deepwater Horizon oil spill commission have been implemented, the administration is again moving forward with an aggressive expansion of offshore drilling in arctic and deepwater areas of the Gulf.

The risks of offshore drilling are real. For the Arctic, the administration last year released its own modeling for a “very large oil spill” from an exploration wellhead blowout that would continue for 74 days, spill over 2 million barrels of oil, spread over 200,000 mi2 (an area larger than the state of California), and oil over 850 miles of shoreline, even spreading into Russian waters. They assure us that this is only a remote possibility, there is a good oil spill response plan, and that 95 percent of any oil spill would be recovered.

Well, we’ve heard it all before. What we know for certain is this — government and industry continue to overstate benefit and understate risks of offshore drilling; industry will not adopt best and safest technology…

Read Article

BP Plc’s (NYSE: BP) Macondo well at the site leaked approximately 53,000 barrels of oil per day from April 20 to July 15, 2010. The study, “Macondo-1 well oil-derived polycyclic aromatic hydrocarbons in mesozooplankton from the northern Gulf of Mexico,” found that oil has contaminated zooplankton, one of the first links in the oceanic food chain.

“Traces of oil in the zooplankton prove that they had contact with the oil and the likelihood that oil compounds may be working their way up the food chain,” Dr. Michael Roman of the University of Maryland Center for Environmental Science said in a statement accompanying the study.

Baby fish and shrimp feed on the tiny, drifting zooplankton, and then introduce contamination and pollution to the larger sea creatures in the food web.

At the time of the oil spill, Houston restaurateurs and food distributors were hit hard by shortages of popular delicacies such as oysters and crabs while regulators scrambled to determine the affects of the spill on marine life.

Researchers identified the Macondo well’s unique chemical “fingerprint” of polycyclic aromatic hydrocarbons in Gulf of Mexico zooplankton. The study shows the chemical fingerprint was present in some zooplankton as much as a month after the leaking wellhead was capped.

However, the report describes the geographic extent of the zooplankton contamination as “patchy.” Some zooplankton far away from the spill were contaminated, but some near the spill site had lower levels of contamination.

Dr. Siddhartha Mitra of East Carolina University added that the researchers’ identification of the well’s chemical fingerprint could prove valuable for other studies.

East Carolina University led the study with researchers from the University of Maryland Center for Environmental Science, Oregon State University , Georgia Institute of Technology , and U.S. Geological Survey. It was published in the February issue of Geophysical Research Letters.

Read Article

It wasn’t suppose to turn out this badly.

Chevron’s Brazilian oil spill, tiny in comparison to major spills like BP’s Macondo well in the Gulf of Mexico in 2010, has cost the company dearly.  It was forced this week to close off its Frade field well in the Campos Basin, 230 miles (370 km) off the coast of Rio de Janeiro.  It has to deactivate its drilling platform. In short, Chevron now has one foot out of Brazil and it just might cost them $2.5 billion — which is what the company spent on their Brazilian oil venture.

Brazil was never known as a place for oil. But around 2007, government owned oil company Petrobras made headlines when it found multiple fields of black gold deep under the ocean floor.  There are not many country’s that allow for foreign oil companies to drill on their home turf, but Brazil does and so ever segment of the global oil economy, and every big name from Russia to Norway to the U.S. has a stake in Brazilian oil production.  For the Western world, this country’s newfound oil wealth is the Saudi Arabia of the Atlantic Ocean. And while volume surely could not compare to desert oil fields in the Persian Gulf, friendly politicians made up for it. One small spill has ruined that for Chevron, at least for now, and maybe for years to come.

“As far as Brazil goes I think it remains to be seen what the future holds for our business there.  We’ve been in Brazil for over 100 years in different areas of the business and have had historically very good relationships there,” said Chevron CEO and Chairman John Watson in a statement on March. 13.

On Nov. 7, Chevron reported an oil leak at its Frade field, some 3,700 feet (1,128 meters) below the surface of the Atlantic Ocean. The problem occurred deep underground, around 1,640 feet (500 meters) under the ocean floor. Around 2,400 barrels of oil leaked to ocean’s surface and was quickly rounded up in about two weeks.  The company took full responsibility for the spill and said that the leak was a result of underestimating the oil reservoir pressure and overestimating the strength of the rock through which they were drilling.

But from that day forward, despite no oil coming anywhere near the pristine beaches of Rio or next door Espirito Santo state, Chevron was caught in the crosshairs. Authorities questioned whether they had acted fast enough to clean the spill, with Federal Police fly-overs reporting that Chevron did not use the required number of vessels to clean the surface of the ocean.

Brazil’s National Petroleum Agency, ANP, fined the company R$50 million ($27.7 million) late last year, citing the company had failed to put in practice the required environmental procedures that would slow the depletion of reservoirs at the well. Chevron has also been cited in a $20 billion civil lawsuit filed by public prosecutors in Rio. Brazilian Federal Police, the local equivalent of the Federal Bureau of Investigation, indicted Chevron and their drilling partner Transocean (RIG), along with executives from both companies in a criminal case alleging environmental crimes and obstruction of justice.

Chevron has essentially been vilified in Brazil and whether or not it is welcome to drill there in the future remains to be seen. By comparison, BP’s Gulf of Mexico disaster was an environmental Armageddon that claimed lives, disrupted the Gulf fishing and shrimping industry, and wreaked havoc on Gulf beaches. Black oil could be seen expanding for miles over the Macondo disaster.

By comparison, Chevron’s oil spill was an everyday occurrence. Petrobras has spilled oil from its wells at least three times over the last four months. Still, small, intermittent droplets of oil were still oozing from the Frade well like dying bubbles in a glass of champagne.  Chevron has nothing to celebrate.

On March 15, Chevron requested authorization for a temporary suspension of the Frade field. Chevron said it will conduct a comprehensive technical study and prepare a complementary study to better understand the geological features of the area.

At this point, Brazil might have had just about enough of Chevron.  The ANP banned the company’s top executives from  leaving the country until the problem with the well is resolved.

“We need to be treated fairly, and we need to be treated consistently,” said Watson in the same March 13 statement. “The rhetoric has been high. Hopefully, we’ll be able to work through those issues and we’ll be a player in Brazil for a long time, but it remains to be seen.”

Frade field produced a total of approximately 60,000 barrels per day (approximately 30,000 barrels net). Following an order from ANP in December, Chevron suspended water reinjection in four wells in the field.

Read Article

RIO DE JANEIRO — A Brazilian federal prosecutor filed criminal charges against U.S. oil company Chevron and drill-rig operator Transocean for a November oil spill off the coast of Rio de Janeiro, the prosecutor’s office said on Wednesday.

The prosecutor, Eduardo Santos de Oliveira, also filed criminal charges against 17 executives and employees at Chevron and Transocean, owner of the world’s largest oil rig fleet. Among the defendants is George Buck, 46, a U.S. national in charge of Chevron’s operations in Brazil, the office said in a statement.

The charges allege that the spill created “a prolonged contamination time bomb” that threatens the entire marine ecosystem.

At least 110,000 gallons of oil seeped through cracks on the ocean floor near a Chevron Corp. appraisal well off the Rio de Janeiro coast in November. The well, drilled by Transocean Ltd., has since been sealed, but a small amount of seepage reappeared in recent days, raising concern the damage is not yet over.

In addition to Buck, prosecutors leveled criminal charges against five other Americans, five Brazilians, two Frenchmen, two Australians, a Canadian and a Briton.

Prosecutors have also asked that that all the assets of those charged be seized, that each person be fined $555,555 and each company $5.6 million.

Brazil has seen much worse oil spills, but the Chevron leak is the biggest test of offshore drilling safety since massive deposits were discovered in recent years, reserves that could hold 50 billion barrels of oil. Prison sentences could reach as high as 31 years.

The spill was less than 0.1 percent of the size of the 4-million-barrel BP oil disaster in the Gulf of Mexico in 2010.

Read Article