Charges filed against Chevron execs in Brazilian oil leak

Seventeen Chevron Corp. and Transocean Ltd. executives were charged with environmental crimes in connection with an oil leak off Rio de Janeiro’s coast, and prosecutors are calling for damage payments and prison sentences.

The companies applied excessive pressure when drilling at Chevron’s Frade field, used faulty equipment and failed to meet requirements to avoid and counter spills, the federal prosecutor’s office said. George Buck, head of Chevron in Brazil, and other executives were also charged Wednesday with obstructing an investigation. Prosecutors asked for prison sentences of as long as 31 years.

The 3,000-barrel slick at Chevron’s $3.6-billion Frade project in November occurred at a time Brazil was increasing scrutiny of deep-water drilling after the 2010 Macondo oil spill in the Gulf of Mexico. Chevron was “careless” when drilling the well, Rio de Janeiro State Environment Secretary Carlos Minc said.

Chevron said in a statement that the criminal charges are “outrageous and without merit.”

“Chevron will vigorously defend the company and its employees,” spokesman Kurt Glaubitz said.

Prosecutors are asking each company to pay 10 million reais ($5.5 million) and demanding 1 million reais from each executive for damage to the environment.

Michael Legrand, Transocean’s head of operations in the country, is also among the 17 executives, who were barred from leaving Brazil this week while prosecutors conduct a probe.

San Ramon, Calif.-based Chevron suspended production in Brazil last week after identifying a second leak in the Frade area.

The oil seep this month didn’t come from the same field as the November leak, Chevron said.

The company has 15 days to respond to the Brazilian oil regulator’s report on the spill.

“Our measures are not excessive,” Minc said. “We’re not after Chevron because it’s foreign.”

Brazil applies the same rules to foreign oil companies as it does to state-controlled oil producer Petroleo Brasileiro, Energy Minister Edison Lobao said.