Chevron targeted a second time by Brazil prosecutors seeking ban

Brazilian prosecutors are seeking for a second time to ban Chevron Corp. and Transocean Ltd. from operating in the country after a 3,000-barrel oil spill.

The two companies must be suspended from operating until they stop environmental damage from the November leak off the coast of Rio de Janeiro, Prosecutor Gisele Porto said in a March 26 appeal filing obtained by Bloomberg News. The two companies should be fined 500 million reais ($273 million) a day if they don’t comply with the suspension, according to Porto.

Chevron is facing mounting attacks from Brazilian politicians, prosecutors and regulators after the leak at its $3.6 billion Frade project in November and a second seep in March. Federal prosecutor Eduardo Santos, who's probing the slick independently from the regulator, charged 17 executives at Chevron and Transocean with environmental crimes and called for prison sentences of as much as 31 years.

Chevron took out full-page advertisements in several Brazilian newspapers March 29 to say the Frade leak hasn't caused environmental damage. The company said the criminal charges against its executives are unfounded.

Porto's appeal comes after a federal judge in February rejected a request from prosecutor Santos, who is based in the city of Campos dos Goytacazes, to halt Chevron and Transocean operations after the spill. Federacao Unica dos Petroleiros, Brazil's main oil union, filed a separate case last week to halt Chevron and Transocean’s work in Brazil.

Chevron responded to the spill in accordance with industry standards and the development plan approved by the country's oil regulator, Kurt Glaubitz, a spokesman for the San Ramon, California-based company, said by e-mail March 30. There's been no impact to marine life and no oil reached the coast, he said.

Chevron reported new seeps this month of about a barrel of oil at the Frade project off Brazil's coast. The company has halted production as a precautionary measure.

(Published by Bloomberg - April 1, 2012)