(EnergyAsia, November 25 2011, Friday) — Brazil has banned Chevron Corp from further offshore drilling despite the US oil major accepting full responsibility for an oil spill and pledging to counter the damage.
State regulator Agencia Nacional do Petroleo (ANP) demanded that Chevron, which operates the US$3.6 billion Frade offshore field, improve its safety practices, while announcing the indefinite ban until investigations are complete into how oil leaked from an appraisal well on November 7.
Brazil is courting foreign investments to find and produce hydrocarbons off its coast, but is also worried about possible environmental and health damages in the wake of last year’s Gulf of Mexico oil spill.
The ANP’s decision came shortly after Chevron had announced that its subsidiary, Chevron Brasil Upstream Frade Ltda, had voluntarily and indefinitely suspended its current and future drilling operations even though it had not been told to do so.
The voluntary suspension includes the company’s permitted pre-salt wells in the Frade field with the exception of current plug and abandonment activities.
Chevron said the suspension will not impact operations at the Frade field from which a Chevron-led consortium is producing 79,000 barrels of oil equivalent per day.
Its top executive in Brazil, George Buck, said the company had underestimated the amount of pressure at a reservoir at the Frade project about 370 kilometers northeast of Rio de Janeiro. The pressure caused a fissure in the ocean floor, releasing oil from the well.