Brazil warns Chevron over offshore oil well seepage

Brazilian authorities warned US energy giant Chevron Thursday that it faces severe punishment if it fails to completely seal an offshore well that has been seeping oil in waters off Rio de Janeiro state. "If Chevron is not fulfilling its role, it will be punished more severely," Mines and Energy Minister Edison Lobao told reporters as he announced corrective legal steps" against the company. Tuesday, Chevron said it had successfully sealed the ruptured offshore well. Also Tuesday, Rio state's Environment Secretary Carlos Minc warned that the spill area was located on the route used by whales and dolphins. "We are really concerned. At this time of the year, these animals travel from north to south to seek an area to reproduce," he added, warning that winds could push the oil slick toward the coast. But Thursday Chevron said "cementing operations are taking place as part of its well plugging activities on an appraisal well located in the vicinity of the Frade field offshore Brazil." The Frade field is located some 370 kilometers (230 miles) northeast of Rio de Janeiro. Chevron also stressed "that there has never been any oil flow from the wellhead and current monitoring indicates oil from nearby seep lines on the ocean floor have reduced to infrequent droplets." It said it was continuing "to monitor the oil sheen which has substantially dissipated." Chevron estimated "the volume of the oil sheen on the ocean surface to be less than 65 barrels," and said the slick was located about 120 kilometers (72 miles) offshore and "continues to move in a south-easterly direction away from the Brazilian coast." It said it was continuing "to fully inform and work with Brazilian government agencies and industry partners on all aspects of this matter." Brazilian authorities hope that the emergency will be fully controlled so they can set a fine "proportional to the environmental damage cause" which can only be "measured at the end of the work," according to the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama). Federal police are also investigating whether Chevron lied when it said the spill had been contained, the O Globo daily quoted police official Fabio Sciliar as saying. Brazil's President Dilma Rousseff has demanded a "rigorous investigation into the causes of the accident." Brazil in recent years has been moving to tap huge reserves of oil and gas discovered in very deep water -- at depth up to 7,000 meters -- in the Atlantic, under a thick layer of salt, requiring huge investment.