“Crack in the Seabed” Causing Oil Slick in Campos Basin Off Brazil, Not Chevron’s Frade FPSO

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November 12, 2011


RIO DE JANEIRO -(Dow Jones)- The Brazilian unit of U.S. oil company Chevron Corp. (CVX) is rushing equipment to find the cause of an oil leak at the offshore Frade field, but the spill is not related to a production well and output is continuing normally, a Chevron spokeswoman said in an interview Thursday.

“We don’t yet know the cause of the spill, but we know for sure that it is not from a production well,” the spokeswoman said.

The oil spill will likely once again call into question the safety of drilling for oil and natural gas far offshore after last year’s Macondo disaster in the U.S. Gulf of Mexico. Chevron became aware of an oil slick of an undetermined size between the Frade field, about 120 kilometers off the coast of Espirito Santos state, and the nearby Roncador field operated by Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, the company said. The two fields are located in the Campos Basin offshore Brazil, where more than 90% of the country’s crude oil is produced.

“This is not the same thing as Macondo,” the spokeswoman said, adding that oil leaks from the seabed were “normal” in the Campos Basin. The oil slick is not expected to reach the coast, the spokeswoman said. Heloisa Marcondes, the communications and press relations coordinator for Chevron Brasil Petroleo Ltda., earlier said that the leak was related to a crack in the seabed, a natural phenomenon.

“All of the appropriate actions to respond to the emergency and minimize any impact on the environment are being taken,” Chevron said in a statement.

Chevron first started production at Frade in 2009, when it joined a small list of foreign oil companies producing in Brazil. Chevron is lead operator of Frade, which holds estimated recoverable reserves of between 200 million and 300 million barrels of oil equivalent, with a 51.7% stake. Petrobras holds 30%, while the Frade Japao Petroleo Ltda. consortium has the remaining 18.3% share.

In September, the Frade field produced 80,425 BOE per day.

-By Jeff Fick, Dow Jones Newswires

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