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Opinions Divided Over Chevron Trial in Brazil

Fabiana Frayssinet

RIO DE JANEIRO, Mar 22 2012 (IPS) - Opinions are divided in Brazil over the prosecution of U.S. oil giant Chevron for two oil spills. While some argue that the legal action is an over-reaction triggered by nationalism, others say it is necessary to show that Brazil is serious about protecting the environment.

The public prosecutor’s office filed criminal charges this week against Chevron for the November oil spill that dumped 2,400 barrels of crude and for a smaller leak in March, both of which occurred at the Frade field, 370 km off the coast of Rio de Janeiro

Chevron says the second spill at the well, located at a depth of 1,200 metres in the Campos basin, involved just five litres. But experts say that much more oil was leaked, and that the oil slick is one square kilometre in size, near the first leak.

“What matters is not the size of the spill,” said the Rio de Janeiro state environment secretary Carlos Minc, comparing it with the Gulf of Mexico oil spill in 2010, where some four million barrels were dumped.

“What does have to be taken into account is that (the Chevron executives) did not have the equipment necessary to contain it, that they concealed information, and that there was imprudence,” Minc told foreign correspondents, after he was asked whether the government was over-reacting.

Subsalt challenges

The oil slick, regardless of its size, the Chevron case, and smaller spills all raise a more serious question: whether or not the country has the capacity to deal with the risks involved in deep sea oil exploration, said oceanographer David Zee at the Rio de Janeiro State University.

He underlined that the environmental and technological challenges are greater in the case of Brazil’s subsalt reserves, which lie about seven km below the surface of the ocean, beneath a layer of salt up to two km thick.

The government estimates that the reserves, discovered in 2007, could be up to six times the country's entire proven reserves of 14 billion barrels.

According to Zee, exploitation of the subsalt oilfields poses higher risks, "because we will be exploring at greater depths below the seabed."

"We will be reaching regions that we have never before explored, and that can bring complications, like high-pressure bubbles and fragilities in the geology of the seabed," he said.

"Exploiting the subsalt reserves, which is very important for the country in economic, strategic and energy terms, has to be done with precautions and safety, so that we have credibility at a global level," he added.

“There was greed for profit here, and little investment in prevention,” Minc said.

The preliminary investigations indicate that one of the causes of the first spill was excessive pressure used in drilling the sea floor, above the limit established by prior geological studies, which had warned of faults in the oilfield.

And according to the inquiry, the second leak is apparently a consequence of the first.

Because of the cracks in the rock in the seabed, oil is likely to continue to leak, say reports by the National Petroleum Agency (ANP) and the Brazilian Institute of Environment and Renewable Natural Resources, two federal oversight agencies.

Chevron and the Transocean drill-rig operator “have installed a prolonged-effect pollution bomb,” said the prosecutor who filed the charges Wednesday, Eduardo Santos de Oliveira.

Under Brazil’s environmental crimes law, he is seeking prison sentences for 17 Chevron and Transocean executives – most of whom are foreigners, including George Buck, head of Chevron in Brazil.

The executives face sentences of between five and 31 years, and are barred from leaving the country.

In addition, the company is being sued for 11 billion dollars in damages.

“If they say that by enforcing the environmental law, I am exaggerating, then I am,” said Santos de Oliveira, who added that the entire Frade field could be affected.

“Our messages is: you are welcome, you will not be persecuted or discriminated against,” Minc said, stressing that it is not the government’s intention to scare off foreign oil companies interested in investing in Brazil.

“But you have to take precautions, use the best technology, and be transparent. And if a mistake is committed, know that we will be rigorous,” he added, referring to the need to set an example in the area of environmental protection, especially as Brazil is about to host the U.N. Conference on Sustainable Development, or Rio+20, in June.

Minc said the Atlantic Ocean, where more than 90 percent of the country’s oil production is concentrated, is Brazil’s “blue Amazon”.

But Adriano Pires, head of the energy consulting firm Brazilian Infrastructure Centre, said the government was over-reacting, and questioned the pressing of charges before the full results of the investigation were in.

“If the U.S. government had had the same level of reaction to the Gulf of Mexico accident, the president of BP would have had to be sentenced to life in prison,” Pires said in an interview with IPS.

He also said that when it comes to oil, “politics and nationalism take precedence over technical questions, in Brazil.”

After it was founded in 1953, the state-run Petrobras had a monopoly in the oil industry. It was not until 1997 that, under the government of Fernando Henrique Cardoso (1995-2003), foreign oil companies were allowed to take part in exploration and production.

Brazil’s left-wing President Dilma Rousseff said that foreign oil companies operating in Brazil must know that the country’s safety regulations will be enforced.

Edison Lobao, the minister of mines and energy, pointed out that Petrobras is subject to the same rules as the rest of the companies, and must “respond” if it violates them.

He also said foreign capital “is welcome, but it has to respect our laws.”

Meanwhile, in a statement, Chevron said “There is no technical or factual evidence demonstrating any wilful or negligent conduct by Chevron or its employees associated with the incident. We have sought to perform our operations in full compliance with Brazilian laws and industry practices and to comply with all applicable licenses and authorisations.”

It also said the second leak was not linked to the first, because the oil has different characteristics. It stated that the first was caused by “unexpected pressure” encountered when drilling, while no drilling was taking place at the time of the second spill.

A lawyer for Chevron, Nilo Batista, denied that the company is going to pull out of Brazil, and said it had merely suspended production at the Frade field as a preventive measure.

But he said the case had been blown out of proportion, and that there was “a slightly xenophobic tone that has surprised me.”

Another lawyer for the company, Oscar Graça Couto, stressed that the oil leak caused no harm to human health and no measurable harm to the fauna and flora.

“No whales, dolphins, turtles or birds were hurt, let alone killed. In fact not even one sardine perished,” he said at a press conference in Rio de Janeiro.

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