Brazil fines Chevron additional $5.4 million for oil spill

Brazil has fined US oil giant Chevron Corp an additional $5.4 million for breaching the terms of its environmental license as it was not able to tackle its last month oil spill off the coast of Rio de Janeiro.

The latest fine comes after Brazil's oil and gas regulator National Oil Agency (ANP) last month fined the San Ramon, California-based company $27.6 million and temporarily suspended all its drilling activities in the country (See: Brazil suspends Chevron's drilling, fines $27.6 million for causing oil spill).

ANP had also threatened to impose two additional fines of $28 million each on the company for releasing "false information" and for not having adequate equipment to contain the spill that released almost 3,000 barrels of oil into the sea from Chevron's Frade field in the oil-rich Campos basin in deep Atlantic waters off the coast of Rio de Janeiro state.

Although these fines may not hurt Chevron, what is expected to affect its balance sheet is the $10.7-billion suit filed by Brazil's federal prosecutor in Rio de Janeiro this month. (See: Brazil sues Chevron, Transocean for $10.7 bn over oil spill)

Brazil's environment inspector Ibama said the latest fine was because Chevron breached the 'individual emergency plan' set out in the environmental license and the oil company was ill-equipped and ill-prepared to contain the spill.

Chevron defended itself by saying that it followed the procedures laid out in the emergency plan, "The plan was deployed rapidly and standard procedures were quickly carried out in order to stem the source of the leak. In just four days, a period considered excellent by industry experts, the company managed to control the source of the leak."