Brazil suspends Chevron's exploration activities

Brazil on Wednesday suspended the exploration activities of US energy giant Chevron in its territory following an oil spill off Rio de Janeiro state. The national oil agency ANP said Chevron Brazil's activities would be suspended until "the cause and those responsible for the spill have been identified and safety conditions have been restored in the area." Chevron's top official in the country meanwhile apologized to lawmakers for the incident which could jeopardize its access to huge new offshore oil fields. The sub-salt fields, which ANP says have reserves that could surpass 100 billion barrels of high-quality recoverable oil, are off the country’s southeast Atlantic coast beneath kilometers of ocean, bedrock, and hot salt-beds. On November 8, a helicopter from Brazil's state-owned oil company Petrobras spotted a crude oil slick on the ocean and the leakage was traced by an underwater robot to a well operated by Chevron 1,200 meters (4,000 feet) deep near the Frade field, 370 kilometers (231 miles) northeast of the Rio de Janeiro coast. Brazilian authorities say the spill is now under control and that the oil slick has been reduced to two square kilometers. ANP on Wednesday also rejected a Chevron request to drill a new well in the Frade field in order to reach the sub-salt fields. It said such drilling would "pose risks to the environment similar to those that occurred in the well where the spill occurred, but bigger and magnified by the greater depth." "I sincerely apologize to the Brazilian people and government," George Buck, president of Chevron's subsidiary in Brazil, told the chamber of deputies. "I would like to reiterate that we have deep respect for Brazil, for the Brazilian people, for the environment, for the laws and institutions of this country," he added. "We are going to thoroughly investigate the accident and present the results to the Brazilian people...so that this does not happen again either here or in any other part of the world," Buck added. Chevron now faces a slew of fines from federal and Rio state authorities that together could exceed $145 million. Monday Buck said 2,400 barrels of oil seeped into the ocean between November 8 and 15 but ANP and a non-governmental organization respectively report 3,000 and 29,904 barrels. The head of Brazil's environment agency Ibama, Curt Trennepohl, meanwhile said it has not been possible so far to quantify the damage caused to the environment. "So far we have no evidence of fatalities among birds and fauna. Which does not mean they could not have occurred," he added. ANP blamed Chevron for "negligence" in the investigation of basic data and in the formulation and execution of plans to abandon the leaking well "in addition to a lack of attention to the best practices of the industry."