ConocoPhillips has suspended its offshore drilling operations in Brazil for an indefinite period.
The announcement from Chevron comes as Brazil's National Petroleum Agency (ANP) served notice of suspension of activities on Chevron's Brasil Upstream Frade Ltda. subsidiary.
Chevron deploys a containment device in Brazil Image: Chevron |
The cause of the suspension is an oil spill from the ocean floor in the Frade Field, some 230 miles North East of Rio De Janeiro, which caused development drilling to be suspended in early November. The ANP estimated the release of between 200-300b/d before it was contained. As a result Chevron is facing initial fines of $28m for the damage caused.
Despite Chevron's efforts to disperse the leaking oil and the surface oil sheen (reduced to around one barrel according to Chevron) as well as contain the leak itself, the ANP posted a notice of suspension on its website and Chevron took steps to suspend all operations even before the ANP had contacted them formally.
A subsequent bulletin from Chevron stated that the ANP has requested the shut down of one of the 11 production wells and four produced water injection wells at its floating facility. Chevron stated that the production well acounted for less than 10% of the Frade field's 79,000boe/day. Meanwhile, production from the rest of the field will continue.