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Oil Price Rally Revives Offshore Oil Sector

Oil Price Rally Revives Offshore Oil Sector

The offshore sector was one…

Petrobras Now being Drawn into the $11 Billion Chevron Case

Following the deepwater horizon spill at BP’s Macondo well in the Gulf of Mexico back in 2010, Brazilian authorities have increased their scrutiny of wells of their own shores.

Gianna Bern, the president of Brookshire Adivsory, a Chicago based risk management firm, said that, “the Brazilian government is going to come down with some significant penalties even for minor accidents, there are indeed some very draconian measures that are being implemented.”

Back in November 2011, roughly 3000 barrels of crude spilled into the ocean at the Frade project of which Chevron hold the majority stake and also operate.  As a result federal prosecutors in Brazil have come down hard, and last year made a claim of $11 billion against Chevron and Transocean Ltd.

Chevron holds a 52 percent stake in the Frade project, but Petroleo Brasileiro SA (Petrobras), Brazil`s state owned oil producer, also owns 30 percent, and during the regulatory filing on 30th March this year they were warned that they could be found liable for 30% of any damages that Chevron must pay. Petrobras have complained that this new ruling is “unreasonable”.

On 29th March Chevron took out full page advertisements in several Brazilian newspapers to say that the Frade leak didn’t cause any environmental damage, and therefore all criminal charges against its executives are unfounded.

By. Joao Piexe of Oilprice.com


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