Authorities in Brazil are preparing to file criminal charges as a result of an offshore oil spill involving Chevron and Transocean. Prosecutors said the criminal charges could result in 20-year prison terms for each defendant. Environmental officials in Brazil say that stiff penalties are needed to press companies to adopt stringent procedures for preventing and dealing with spills.
Chevron has argued that the country’s response to the spill was an “overreaction.” Ali Moshiri, a senior executive in Chevron’s Latin America operations, said, “I’ve never seen a spill this small with this size of reaction.” Authorities accused Chevron of lying about the scope of the spill.
Seventeen employees from the companies have been ordered by a Brazilian court to surrender their passports and are barred from leaving Brazil. The ruling was issued by Judge Vlamir Costa Magalhães, who said, “There is no doubt the exit of these people from the country, at this moment, would generate considerable risk to the investigation.” The ruling was made at the request of a federal prosecutor.
Chevron spokesman Kurt Glaubitz said, “We will defend the company and its employees,” and that “…any legal decision will be abided by the company and its employees.” Guy Cantwell, a spokesman for Transocean, declined to comment. Prosecutors have also filed a civil lawsuit seeking damages of about $11.2 billion from the company.
Chevron’s woes in Brazil began in November 2011 when oil was found leaking from an offshore field controlled by the company. Brazil’s Navy recently detected a new oil sheen from the field where the spill occurred. Chevron said it has halted output while the company captures the oil in containment devices. The company may also face charges related to the seepage found, which resulted in a sheen extending over one kilometer.
Brazil could join the largest oil producers in the world if plans to tap its huge offshore oil fields are effective, giving the country an output rivaling or surpassing other oil producing countries like Iran and Venezuela. However, companies interested in drilling for oil in Brazil must drill in immensely challenging offshore conditions.