Brazil and Chevron Juggling Oil Pollution vs Money
By B. McPherson
The government of Brazil is fining Chevron about $28 million dollars for the oil spill in the Campos Basin. That’s a little under four days production. Chevron struck oil in their lease concession but the deep water drill site brought up oil at high pressure, enough to force oil up through the pipe and also to allow it to seek escape through weak rock formations.
The spill wasn’t reported immediately. The accounts vary depending on who is relating them. The Chevron position is that they assumed the oil slick on the Atlantic was a result of operations by the state owned Petrobas corporation. The Brazilian government is saying that Petrobas was forced to report on Chevron and that Chevron underestimated the amount of oil that escaped to the surface.
This current leak is far smaller than the BP catastrophe in the Gulf of Mexico in 20ll which saw millions of barrels of oil foul water and beaches in the USA, but the Campos Basin is a massive formation which has several oil exploration companies operating on leases. Spills and accidents are part of the offshore operations. In 2001 an oil rig sunk, releasing about 400 000 barrels of oil into the Atlantic.
Deepwater drilling is a relatively new phenomenon. New technology and higher oil prices have made the exploration for petroleum at depths greater than 1000 feet economically and technically feasible. Along with great rewards when a company hits a pool of oil are great risks to the environment.
Today, according to Benzina, Chevron has announced that no oil escaped from their well head and seepage through the weakened rock has been reduced to droplets.
Offshore exploration leases are a lucrative way for governments to increase their revenues without raising taxes. Brazil is putting on two big parties in the next couple of years -- World Cup Soccer and the 2016 Olympics and needs the money from the black gold. Brazil citizens have benefitted from the money from oil production and the sale of leases. They are not alone. Many countries around the world have bet that the benefits from exploiting offshore oil will be greater than the damage done to their coastlines from the inevitable spills.