--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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