Brazil Navy investigates new oil spill off coast

Reuters News
Posted: May 18, 2012 12:39 PM
Brazil Navy investigates new oil spill off coast

BRASILIA (Reuters) - An oil spill was discovered off Brazil's coast near the country's Espirito Santo state, Brazil's Navy said on Thursday, the latest in a series of spills that have raised questions about the safety of a massive expansion of the country's oil production capacity.

The Navy said it has sent a team to investigate and has no immediate estimate of the spill's size.

Oil workers returning home after work offshore said there was an oil stain about 1 kilometer (0.6 mile) long on the ocean near the P-57 oil platform operated by Petrobras, Brazil's state-controlled oil company, the Folha de S. Paulo daily newspaper reported.

The P-57, a converted oil tanker, works in the Jubarte field about 85 kilometers (53 miles) off Brazil's coast. Jubarte produced 186,000 barrels of oil per day in February, or about more than 8 percent of Brazil's total oil output of 2.1 million bpd, according to Brazil's oil regulator, the ANP.

Jubarte is the fourth largest producing oil field in the country. When natural gas is added, production was equivalent to 198,000 barrels of oil per day (boepd).

Petrobras plans to spend about $225 billion over five years to help triple output to about 6 million bpd by 2020. The vast majority of that oil will come from offshore fields near Rio de Janeiro and Sao Paulo.

A spill in the Frade field south of Jubarte in November led to civil lawsuits seeking about $20 billion in damages and criminal charges against Chevron, which operates the field, as well as Transocean, its drilling contractor, and 17 of the two companies' employees.

Chevron and its partners in the field decided to shut down output in Frade after additional, unexplained leaks were found in field waters in March. Frade produced 64,000 barrels a day of oil in February, the ANP said.

Chevron and Transocean deny any wrongdoing. Chevron owns 52 percent of Frade and Petrobras owns 30 percent. The rest is owned by a Japanese group led by Inpex and Sojitz Corp.

Petrobras' press office said it had no comment. The ANP said officials were not immediately available for comment. Brazil's environmental protection agency Ibama did not immediately return calls requesting comment.

Petrobras preferred shares, the company's most-traded class of stock, fell 1.4 percent to 19.02 reais in Sao Paulo trading. The benchmark Bovespa index of the most-traded stocks on the Sao Paulo stock exchange fell 0.33 percent.

(Reporting by Peter Murphy and Jeb Blount, writing by Jeb Blount, editing by Gerald E. McCormick and Marguerita Choy)