Brazil slams Chevron with £7 billion oil spill bill

December 15, 2011 | Legal, South America

Chevron_Oil

Brazilian prosecutors said on Wednesday that they are seeking £7 billion in damages from US oil giant Chevron for environmental damage caused by an offshore oil leak.

They are also asking a judge to order Chevron and Transocean, the drilling contractor, to halt all activities in Brazilian territory.

“During an investigation, the attorney general’s office found that Chevron and Transocean were not capable of controlling the damage caused by the spill of nearly 3,000 barrels of oil, proof of a lack of environmental planning and management by the companies,” prosecutors said.

Chevron claimed that it had received no notice of the action by the federal prosecutors and that Brazilian oil regulators had not contacted it either. Transocean also said it hadn’t received any official notice.

Brazil’s National Petroleum Agency banned Chevron in late November from drilling until an investigation was finished.

And the Environment Ministry fined Chevron about £18 million, but has said the company could face further penalties.

Chevron has not said whether it will fight the fine in court.

The company was strongly criticised by officials for not fully sharing information about the spill in its early days and for not having the proper kit on hand to deal with it.

Oil started leaking at the well off the north-eastern coast of Rio de Janeiro state on November 7.

The chief operating officer for Chevron’s Brazilian division has admitted that the spill occurred because it underestimated the pressure in an underwater reservoir.