Rio oil spill settlement reached

A multi-million dollar settlement has been reached over the Rio de Janeiro oil spill that occurred in late 2011 and posed a major hazard to the natural environment.

US energy giant Chevron and Swiss rig operator Transocean came to the agreement with Brazilian prosecutors, with Chevron agreeing to pay $41.6 million (£26.1 million) in compensation as a result of the leak and its subsequent impact.

The event saw over 3,000 barrels of crude oil leak from the deepwater Frade field, 370 km north-west of Rio, in November 2011.

It resulted in lawsuits being issued, through the Rio prosecutor's office noted that the new deal is set to see Chevron accept "unprecedented obligations" to prevent new incidents and also provide compensation to "put an end" to two civil lawsuits, the AFP reported.

Brazil's National Oil Agency and the Brazilian Environmental Institute have both consented on the deal, though it must be approved by a federal court.

At the time of the incident, Chevron operated the offshore field, which produces 60,000 barrels of oil a day, while Transocea ran the offshore rigs; both companies played a key role in ensuring that Brazil continued to produce two million barrels per day.

However, the leak, and a second one in March 2012, resulted in operations being temporarily suspended, with the Brazilian Environmental Institute imposing two fines totalling $14.6 million to compensate for environmental damage and failures that occurred in the company's accident emergency plan.

So far, Chevron has paid in the region of $15 million in fines for 24 violations that resulted from the first leak, though it benefitted from a 30 per cent reduction in a fine levied by Brazil's oil agency because Chevron did not appeal against the penalty.

After a criminal lawsuit against Transocean and Chevron for environmental crimes and damage to the national patrimony was dismissed in February, Chevron was authorised to partially resume oil production in Brazil in April this year.