Brazil orders Chevron to shut down production well

Brazilian authorities ordered US oil giant Chevron on Thursday to shut down a production well at an offshore facility where a leak was discovered last month. The country's oil regulator said it issued the order after finding dangerous hydrogen sulfide gas in a production well at the Frade field, 370 kilometers (230 miles) off the Rio de Janeiro state coast. The agency accused Chevron of failing to inform authorities about the presence of the gas, discovered during an inspection last week. The US company countered that it "conducts regular monitoring of the substance" and has "safety systems and processes in place." The well accounts for "less than 10 percent" of the field's total production of about 79,000 barrels per day, according to Chevron. The US company said it "respects the decisions" of the regulatory agency and would respond to the government's requests. "All Frade production and injection wells are safe and secure," it added. Last month, a leak in a well operated by Chevron near the Frade field unleashed a crude oil slick in the area, prompting authorities to suspend the company's exploration operations off Rio. Brazilian authorities say the spill is now under control. Chevron faces a slew of fines from federal and Rio state authorities that together could exceed $145 million. The leak could jeopardize Chevron's access to huge new offshore oil fields, which Brazil's National Petroleum agency says have reserves that could surpass 100 billion barrels of high-quality recoverable oil. But Chevron said it was "confident it will successfully respond to the ANP's concerns and be able to resume operation of its production and injection wells in due time."