Chevron Suspended From Brazil Offshore Drilling

By B. McPherson

The Brazilian government has taken action against Chevron Corporation for their part in an oil spill in the Atlantic Ocean. Along with the Brazilian owned Petrobras Corporation, many petroleum companies are vying for the riches in the Campos Basin. November 7, Chevron had an oil spill when unexpectedly high pressure in the oil pool caused a spill and seepage through weak ocean bed rock. Estimates of the amount of oil entering the ocean vary depending on the source of the reporting, but a conservative estimate is at least 3000 barrels escaped.

Bloomberg is reporting that the Brazilian government is taking a tough stand on the spillage and demanding no drilling be done until Chevron comes up with some satisfactory answers.

“The company needs to pay more attention to safety after its “negligence” contributed to the accident, Brazil’s oil regulator, the Agencia Nacional do Petroleo, said yesterday. The ban will remain in place until the regulator identifies the causes and considers it safe to resume drilling, ANP said.” Bloomberg BusinessWeek

Big money is at stake here. Chevron has been fined about $28 million for this incident, but the big prizes are the oil extraction and sale. The Campos Basin is expected to yield huge riches if the oil can be extracted without major ocean pollution.

The sale of offshore oil leases is a big business around the world. As the technology improves to make possible deep water drilling, governments can dream of new sources of revenue. Some countries that currently sell offshore drilling leases: Angola, China, Cuba, Denmark, USA.

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