UPDATE: Brazil's ANP to Meet with Chevron Next Week on Frade Restart

Date : 07/27/2012 @ 5:56PM
Source : Dow Jones News
Stock : Petroleo Brasileiro S.A.- Petrobras (PBR)
Quote : 14.3  0.0 (0.00%) @ 8:48AM
Petroleo Brasileiro share price Chart

UPDATE: Brazil's ANP to Meet with Chevron Next Week on Frade Restart

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--Brazil oil regulator, Chevron to discuss restart of troubled oil field next week

--Frade offshore field was site of November accident that caused 3,700-barrel spill

--Chevron says completing studies to ensure safe startup, production

(Adds Chevron comment, other information, throughout.)

   By Jeff Fick 

RIO DE JANEIRO--Brazil oil regulators and U.S. oil major Chevron Corp. (CVX) will meet next week to discuss restarting production at an offshore field that was the site of an oil spill last November.

In a statement late Friday, Brazil's National Petroleum Agency, or ANP, said it will take up to 30 days to analyze the company's plans to restart output at the Frade offshore field before making a decision. Chevron voluntarily halted production at the field in March, when a second set of oil seepages was discovered in an area not far from the November spill.

At the time, Chevron said it stopped production in an effort to better understand the complex geology of the area. Frade sits in Brazil's offshore Campos Basin, where more than 90% of the country's crude oil is produced.

"Chevron Brazil is actively preparing to restart the field," Chevron said in an email. "We are completing a variety of studies to ensure that the startup and ongoing operations will be safe and incident free."

Chevron is currently finalizing the studies, which will be submitted to the ANP for review before restarting the field, the company said.

The drilling accident last November caused 3,700 barrels of crude oil to seep into the Atlantic Ocean from cracks in the seabed. The spill once again called into question the safety of offshore oil exploration in the wake of the Deepwater Horizon disaster in the U.S. Gulf of Mexico, as well as Brazil's plans to tap ultra-deepwater fields discovered recently off the country's coast.

Earlier this month, the ANP said it would fine Chevron for 25 separate infractions related to the company's response to the November spill. The ANP is expected to levy a fine of up to $25 million against Chevron for the infractions. Additional seepages at the field were also discovered in March. The ANP is currently preparing a report on those leaks, which could lead to additional sanctions, agency officials said previously.

Chevron and drill-rig operator Transocean Ltd. (RIG, RIGN.VX) also face civil and criminal lawsuits for their roles in the incident at the Chevron-operated Frade offshore oil field. Both companies have denied any wrongdoing.

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. Brazilian state-run energy giant Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, holds 30%, while the Frade Japao Petroleo Ltda. consortium has the remaining 18.3% share.

Write to Jeff Fick at jeff.fick@dowjones.com.

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