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Frade FPSO Finally Given Green Light for Restart by Brazilian Authorities

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April 8, 2013

Frade FPSO, Image courtesy Chevron

reuters logoBy Jeb Blount

RIO DE JANEIRO, April 8 (Reuters) – Brazil’s oil regulator, the ANP, said on Monday that it authorized Chevron Corp to restart output from an offshore oil field more than a year after a November 2011 spill forced the No. 2 U.S. oil company to stop Brazilian production.

Chevron was granted permission to restart output from four wells at the Frade field for one year and conditional approval to produce from two other wells in the case that additional production was needed to balance oil and natural gas pressure in the reservoir, the ANP said in a statement.

The Frade field was shut in March 2012 after an initial November leak of about 3,800 barrels of oil and the appearance of small and unexplained amounts of oil in the area in the months following the initial accident. Frade was producing about 70,000 barrels a day when the accident happened.

Brazilian prosecutors were seeking 40 billion reais ($20.1 billion) in damages for the November 2011 spill against Chevron and its drilling contractor Transocean Ltd. It is Brazil’s largest-ever environmental lawsuit.

Brazil’s oil regulator said the spill caused no discernable environmental damage. Criminal charges seeking jail terms up to three decades in prison against the companies and 17 employees were later dismissed by a judge.

Chevron and Transocean have said they have done nothing wrong, and in December prosecutors said they were close to a deal that would see Chevron pay about 311 million reais ($156 million) to settle the claims.

Brazilian prosecutors never charged Frade’s partners in the Frade field.

The Frade field is 52 percent owned by San Ramon, California-based Chevron, which is also the operator. Brazil’s state-controlled Petroleo Brasileiro SA, commonly known as Petrobras, owns 30 percent and Frade Japão, a joint venture between Japanese trading houses Sojitz Corp and Inpex Corp, has an 18 percent stake in the project.

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