The Brazilian government on Wednesday suspended Chevron Corp's drilling rights in Brazil until an investigation into an offshore oil leak at one of the U.S.-based oil company's well sites is completed, Reuters reports.
The decision was announced as the chief executive of Chevron's Brazilian unit was testifying before the Brazilian Congress, where he publicly apologized for the November 8 spill that leaked about 2,400 barrels of oil into the ocean off the coast of Rio de Janeiro.
Brazil's National Petroleum Agency said it decided to halt Chevron's drilling rights after determining that there was evidence that the company had been "negligent" in its study of data needed to drill and in contingency planning for abandoning the well in the event of accident.
The agency, known as ANP, also rejected a request from Chevron to drill deeper wells into subsalt areas in the Frade field where the spill took place. The Frade field, which is located in the oil-rich Campos Basin, is the only block in Brazil where Chevron is producing oil and is the operator.
The Campos Basin is currently the source of more than 80 percent of Brazil's oil output.
Chevron has previously drilled for subsalt depth targets in the field, which is also owned by Brazil's state-controlled energy giant Petrobras and Frade Japao, a Japanese consortium. Chevron owns 52 percent of Frade, whereas Petrobras owns 30 percent and Frade Japao 18 percent.
The decision was announced as the chief executive of Chevron's Brazilian unit was testifying before the Brazilian Congress, where he publicly apologized for the November 8 spill that leaked about 2,400 barrels of oil into the ocean off the coast of Rio de Janeiro.
Brazil's National Petroleum Agency said it decided to halt Chevron's drilling rights after determining that there was evidence that the company had been "negligent" in its study of data needed to drill and in contingency planning for abandoning the well in the event of accident.
The agency, known as ANP, also rejected a request from Chevron to drill deeper wells into subsalt areas in the Frade field where the spill took place. The Frade field, which is located in the oil-rich Campos Basin, is the only block in Brazil where Chevron is producing oil and is the operator.
The Campos Basin is currently the source of more than 80 percent of Brazil's oil output.
Chevron has previously drilled for subsalt depth targets in the field, which is also owned by Brazil's state-controlled energy giant Petrobras and Frade Japao, a Japanese consortium. Chevron owns 52 percent of Frade, whereas Petrobras owns 30 percent and Frade Japao 18 percent.
Chevron has already been fined $28 million by Brazil's environmental agency for the spill and can face further fines if an investigation into the spill reveals more infractions.
The ANP said the suspension will remain in place until Chevron fully restores safety conditions in the field.