Chevron oil spill whips up political firestorm

Chevron is witnessing the wrath of the Brazilian government after its second oil spill with criminal prosecutions likely against senior Chevron staff who have been barred from leaving the country.

The company was responsible for about a 2,400 barrels leak in the Frade field off the coast of Rio de Janeiro last November and further small leakages this year.

A Brazilian federal prosecutor has filed criminal charges against Chevron, Transocean and 17 employees with very significant prison terms – up to 31 years – possible. That follows hard on the heels of a $11 billion civil suit against Chevron and rig operator Transocean.

Chevron has retaliated against the moves with a strongly-worded release. “These charges are outrageous and without merit. Once all the facts are fully examined, they will demonstrate that Chevron and its employees responded appropriately and responsibly to the incident … There is no technical or factual evidence demonstrating any willful or negligent conduct by Chevron or its employees.”

The moves are putting the willies up other foreign operators in the region who are already confined to the less juicy fields, dominated by state-run Petrobras. If carried through, criminal prosecutions and massive fines would make oil prospecting even more state dominated at a time when Brazil urgently needs to bring in more foreign monies to maintain its ambitious oil investment plans.

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I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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