BRAZIL TO FILE CIVIL SUIT AGAINST OIL COMPANIES

12/19/2011

Brazilian federal prosecutors have filed a civil suit against Chevron and Transocean seeking $10.6 billion from Chevron and aiming to suspend both companies from operating in the country. The suit is in response to a leak in November at Chevron's Fade site, which, according to a statement from the prosecutor's office, demonstrated a lack of planning and environmental management by the companies. Chevron responded that the spill was halted in four days with minimal damage to the environment. But public outrage at Chevron, which also currently faces charges in Ecuador due to former Texaco operations, may indicate that the case is politically motivated. The oil company has already been fined $28 million for the spill. A former oil agency official said the case entered "new territory," as the prosecutor's office becomes a national watchdog against environmental damage and corruption. Brazil's legal system allows a large number of appeals, so Chevron and Transocean could both operate for years even if the case is ultimately successful, but the suit could slow the production of a recently discovered 50 billion barrel offshore oil reserve. For the full story, see http://www.reuters.com/article/2011/12/15/us-chevron-transocean-idUSTRE7BE03B20111215. For a previous story on the spill, see http://elr.info/UPDATE/archive/update41-33.cfm#international.