Chevron executives barred from leaving Brazil over spill

A Brazilian court today barred 17 executives from Chevron and Transocean from leaving Brazil, pending criminal charges related to a high-profile oil spill last November.

A federal judge in Rio de Janeiro state granted a request from prosecutors who are pressing for charges against both firms, a spokesman for prosecutor Eduardo Oliveira said in a phone interview. George Buck, who heads Chevron's Brazil unit, and the other 16 executives must turn in their passports to the police within 24 hours, the spokesman said.

Charges are expected to be filed on Tuesday or Wednesday, according to the prosecutors' press office.

The court decision came a day after the Brazilian navy spotted a thin stain of oil extending for about 0.6 mile in offshore field Frade, which was also the site of last year's spill. US-based Chevron said in a statement it halted production at Frade on Saturday after winning permission from Brazilian oil industry regulator ANP.

Neither Chevron nor any of its executives "have been formally notified of any action by the judiciary yet," the company statement said. "Any legal decision will be abided by the company and its employees. We will defend the company and its employees."

Prosecutors want to press a criminal indictment of Buck and other executives from Chevron and Swiss-based offshore drilling company Transocean, three government sources told Reuters in January. Transocean's rig was used in the Frade field.

It is up to a judge to determine whether to accept the charges and proceed with indictments.

Chevron's spill in November leaked as many as 3,000 barrels from sea-floor cracks. It resulted in an US$11 billion civil lawsuit, the largest environmental damages case in Brazil's history, although the total amount of oil was less than 0.1 percent of the BP spill in 2010 in the Gulf of Mexico.

Chevron's troubles in Brazil could force it to rethink Latin American strategies. A shortage of trained workers, engineers and equipment has driven up costs in Brazil, and Chevron faces an US$18 billion environmental verdict in Ecuador.

Chevron is stopping production plans to better assess its "reservoir management plans" in Brazil, where it has spent over US$2 billion developing the largest foreign-run oil field. The suspension will shut down a field with the capacity to produce 80,000 barrels a day, more than 3 percent of Brazil's oil output.