Rio police seek to indict Chevron, Transocean officials

SAO PAULO, (Reuters) – Federal police in Brazil   yesterday recommended the indictment of several  Chevron and Transocean officials involved in an oil spill in  early November for environmental crimes and withholding  information in an investigation.

The indictment is unrelated to a civil suit brought against  the companies by a public prosecutor on Dec. 14, seeking fines  of $11 billion for their alleged roles in the spill at Chevron’s  Frade field off the coast of Rio de Janeiro.

This latest legal action against Chevron, the No. 2 U.S. oil  company, and Transocean, one of the world’s biggest drillers,  for a 3,000-barrel spill that never reached Brazilian beaches  highlights the major political risks of operating in Brazil.

Head of the investigation for the federal police in Rio de  Janeiro Fabio Scliar said yesterday he submitted  his report to the Federal Public Ministry recommending that it  bring charges against the two companies and its employees.

“I affirmed my conviction … of environmental crimes and  withholding information,” Scliar told Reuters by phone.

Employees of the two companies, including Chevron’s Brazil  Chief Executive George Buck, could face charges if the federal  prosecutor’s office, which is in recess until 2012, accepts  Scliar’s recommendations and pursues them in the courts.

Scliar said the companies were increasing the risks of an  environmental accident in drilling.

“They were betting on luck and lost, which caused this whole  problem that led to environmental losses of grand proportions,”  Scliar said.
Chevron said it was advised the police were seeking  indictments against its employees in Brazil, but that it  believes these “are without merit,” a company spokesman said.

“We will vigorously defend the company and its employees,”  spokesman Kurt Glaubitz said in an email. “The facts … will  demonstrate that Chevron responded appropriately and  responsibly.”

Representatives from Transocean also said the  indictments were groundless and that the facts would exonerate  the company and employees when fully examined.

Although such alleged crimes could carry sentences of over  10 years, according to some experts, it is unlikely any of the  employees of Chevron or Transocean would spend time in jail.

Soon after announcing a series of stunning discoveries in  2006 and 2007 that would become known worldwide, Chief Executive  Jose Sergio Gabrielli at the state-controlled oil company  Petrobras said exploration of the massive offshore subsalt  deposits was virtually without risk.

The storm that Chevron’s relatively small spill last month  has caused in the local courts will cast a pall over one of the  most promising new oil frontiers in decades and gives investors  reason for pause before they pay top dollar for offshore blocks  that concession holders are looking to farm out.

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