Chevron’s Brazil Oil Spill: What it looks like when no one defends oil company lies
November 24, 2011 by William K. Wolfrum
There is something odd happening here in Brazil. There is an oil spill – courtesy of Chevron – off the coast here. That’s not the odd part. In fact, it increasingly seems like a normal occurrence. Chevron has thus far lied about the oil spill and has shown a lack of preparation in dealing with it. But there’s nothing strange about that, either.
No, the odd part is this – there are no sectors of Brazilian politics or the media that are rushing to defend Chevron on the oil companies for this spill, nor is the government working to help Chevron’s public relations team. In fact, the Brazilian government is working hard to make Chevron responsible for the spill, which is coming from a leak at more than 1,000 meters below the sea in the Frade oil field off the coast of the state of Rio de Janeiro.
Yesterday, the Brazilian government banned Chevron from drilling in Brazil (all of Chevron’s drilling activities are in the Frade oil field) while the government investigates the reasons for the spill. From Bloomberg:
The company needs to pay more attention to safety after its “negligence” contributed to the accident, Brazil’s oil regulator, the Agencia Nacional do Petroleo, said yesterday. The ban will remain in place until the regulator identifies the causes and considers it safe to resume drilling, it said.
’’This is a setback for Chevron in Brazil,’’ Gianna Bern, president of Chicago-based risk management adviser Brookshire Advisory and Research, said yesterday in a telephone interview from Buenos Aires. “It will be challenging for Chevron to emerge unscathed from the accident.”
Brazil is seeking to ensure foreign oil companies such as BP Plc, Statoil ASA and Royal Dutch Shell Plc, which are exploring in deep waters off the coast of Brazil, help the country maximize vast oil deposits located deep beneath the ocean while avoiding disasters similar to the BP Gulf of Mexico oil spill. Brazil expects crude production to double during the next decade as it develops the largest oil finds in the Western Hemisphere since Mexico’s Cantarell in 1976.
In something that may come as a shock to Americans who watched Republican Rep. Joe Barton apologize to BP for the Gulf Coast Oil Disaster, it is Chevron that is eager to apologize and accept the punishments that have thus far been levied against the company.
Chevron said it “has not received any formal notice from” the Brazilian regulator suspending its drilling license, although it “acknowledges” the ANP posted a notice on the suspension on its website, according to a statement today.
The oil producer “will adhere to all the rules and regulations of the government of Brazil and its agencies,” Lloyd Avram, a spokesman, said in an e-mail. Chevron, based in San Ramon, California, continues production from the field, he said. The stock slid 2.8 percent to $93.75 at the close in New York yesterday.
Chevron hopes to continue operating in Brazil, George Buck, the head of Chevron’s Brazil operations, said in a Congressional hearing in Brasilia yesterday. “I ask sincere apologies to the Brazilian people and the Brazilian government,” he said.
On Monday, Brazil’s Environmental Department fined Chevron $50 million for the leak. The Minister of Environmental Department, Izabella Teixeira, said the company is likely to be fined more as investigation into the spill and response continues.
The leak began on Nov. 8, and Chevron’s PR department quickly began a BP-like assault. First, the company stated that recent drilling in the area was not the cause of the leak. They later admitted it was.
Also on Monday, Buck stated that the leak had been sealed. It isn’t.
“If there is still leaking? Yes, the leak is still ongoing. It was shown a video that shows the worst point of the stain on the seabed, and less than three barrels on the ocean surface, “he said. Shortly before, during the hearing, Buck had said the leak was contained and that there would be only “residual oil” – that statement was challenged by the coordinator of operational safety of the ANP, Raphael Moura.
“The NPA has identified small leak, but flowing,” said Moura. After being questioned by a deputy on the subject, Buck admitted that the leak continues and said that Chevron is “trying” to reset the oil leak.
Chevron originally stated the leak had spilled less than 600 barrels of oil, then said that the leak had released 2,400 barrels of oil into the water. Brazilian officials put that figure at closer to 8,000.
Brazilian authorities are also questioning whether Chevron has used illegal foreign workers in their Brazilian operations.
“Do not trust Chevron,” said Ecuadorian lawyer Pablo Fajardo, who led the lawsuit against the oil giant. “Chevron took our oil, polluted our rainforest, harmed and killed our people, committed fraud, and then tried to cover it up.”
Fajardo added, “Chevron’s handling of the oil spill in Brazil shows that the company has a systemic problem in failing to meet its environmental obligations to the communities where it does business. From what we have observed in Latin America, Chevron officials simply lie about environmental problems as part of the company’s business model. ”
Humberto Piaguaje, an indigenous leader in the area of Ecuador where Chevron operated, said, “In Ecuador, we have lived with Chevron’s contamination for five decades, and the company has refused to pay for the damage and destruction it caused. All governments in Latin America should beware of these basic facts before they do business with Chevron,” said Piaguaje.
A recent court judgment, issued after an eight-year trial, found that Chevron intentionally dumped billions of gallons of toxic wastewater into the rainforest when it operated in Ecuador from 1964 to 1992. The court found the company left more than 900 unlined waste pits that to this day contaminate groundwater and nearby rivers and streams, decimating indigenous groups and farmer communities who no longer have access to clean water.
While pointing out the deficiencies of the Brazilian government would take multiple posts, one thing the Chevron oil spill has shown us is that Brazilians of all parties and ideologies take it seriously when a foreign corporation comes to their land and wrecks havoc. Expect to see Brazil keep the pressure on Chevron to clean the mess they’ve created and to not lie about the situation.