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Brazil fines Chevron $28 million for oil spill

By the CNN Wire Staff
updated 8:03 AM EST, Wed November 23, 2011
STORY HIGHLIGHTS
  • NEW: The company could face additional penalties
  • Drilling contractor Transocean says it is cooperating with authorities
  • Chevron admits responsibility, says it does not know how much oil has leaked
  • Rio de Janeiro's environment secretary criticizes Transocean

Sao Paulo, Brazil (CNN) -- Chevron was fined $28 million for an oil spill off the country's coast and could face further penalties, state media reported on Monday.

The leak off Rio de Janeiro state has stopped, said Curt Trennepohl, president of the Brazilian Institute of Environment and Renewable Natural Resources, according to state-run Agencia Brasil. Residual oil in the rocks, however, may still rise to the surface for a few days, he said.

Trennepohl said Chevron was hit with a $28 million fine and could face more penalties if it is shown the company failed in the execution of its emergency plan, Agencia Brasil reported.

Rio de Janeiro Environment Secretary Carlos Minc criticized drilling contractor Transocean, accusing the company of trying to drill at too high a pressure, given the geological characteristics of the seabed.

"This accident was avoidable. ... It was incompetence. That is an environmental crime, " he told Brazil's Globo TV.

A Transocean spokesman said the company is cooperating with authorities but declined to provide further information.

"Transocean continues to fully cooperate with Chevron, the operator of the well, and the Brazilian authorities in all aspects of this matter," spokesman Guy Cantwell said.

Transocean owned and operated the Deepwater Horizon drill rig, which exploded last year, kicking off the worst oil spill in U.S. history. The company remains tangled in legal disputes with BP and Halliburton over responsibility for the 2010 gusher. A U.S. government report released in September said all three companies share responsibility for the disaster, which led to more than 200 million gallons of oil being released into the Gulf of Mexico.

Chevron admitted responsibility for the Atlantic oil spill off Brazil's coast in a statement Sunday but said it was still trying to calculate how much oil had leaked at its exploration site off Rio de Janeiro.

Brazil's National Petroleum Agency had estimated the total volume of oil released at between 5,000 and 8,000 barrels (between 210,000 and 336,000 gallons), according to Chevron.

"Chevron takes full responsibility for this incident," Chevron Brazil country manager George Buck said in the company's statement. "We are committed to deploying resources until the sheen can no longer be detected."

Over the weekend, Minc accused Chevron of underestimating the amount of oil that had leaked.

Buck denied that accusation, telling Agencia Brasil that it was difficult to define the real dimension of the problem.

Last week Brazil's Federal Police agency said it was investigating the spill, saying those responsible could face sentences of up to five years in jail if found guilty.

Brazil's oil and gas regulator has said the spill is dispersing and moving away from the Brazilian coast, so it does not appear to threaten Rio's world-famous beaches. But it does raise questions about how prepared Brazil is for the development of its offshore "pre-salt" deposits, which are expected to turn the country into a major oil exporter in the coming years.

CNN's Catherine E. Shoichet, Cibele Lorenzoni, Marilia Brocchetto and Shasta Darlington contributed to this report.

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