A Review of the Nigerian Energy Industry

‘Chevron committed to Brazil despite $11bn lawsuit’

16 December 2011, Sweetcrude, RIO DE JANEIRO – Chevron Corporation says it remains committed to Brazil despite the massive $11 billion lawsuit related to an offshore oil spill instituted against it in the country.

“We are committed to Brazil,” Ali Moshiri, president of Chevron’s Latin American exploration and production unit, told reporters at a conference in Houston according to Reuters. “We continue to work with the federal government of Brazil, with all the agencies.”

The release of 2,400 barrels of oil from Chevron’s Frade prospect was an “unfortunate incident” and the company is doing what it can to solve the problem and move ahead, Moshiri told the news wire.

San Ramon, California-based Chevron has already assumed responsibility for leaking oil into water off the coast of Rio de Janeiro.

Brazilian prosecutors sued Chevron and rig operator Transocean on Wednesday over their alleged roles in the November oil spill. The lawsuit seeks to suspend the companies from operating in that country.

Phil Weiss, oil analyst at Argus Research in New York, found the figure to be “really excessive,” adding that no other oil company would ever drill off of Brazil if this was the potential penalty.

“I have a hard time seeing how it’s going to stick,” Weiss said on Wednesday. “Unless this is Brazil’s way of saying they want Petrobras to do everything themselves offshore.”

Petrobras, Brazil’s national oil company, accounts for more than 90% of the country’s output.

Chevron’s Moshiri said it was important to note that the oil company stopped the source of the leak in four days and it has provided all of its resources to make sure there is no environmental impact.

Brazil has vast offshore reserves of crude oil and large western oil companies like Chevron are eager for access to those resources to grow their own output.

A spokesman for Chevron said the company has yet to receive formal notice of the lawsuit.

Shares of Chevron fell 1% to $99.63 in late New York Stock Exchange trading.

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