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Second Chevron oil spill in Brazil halts production

A second spill in Brazil is worrying authorities here.
Chevron brazil oil spill 2012 3 16Enlarge
Greenpeace activists protest against an oil spill in waters off Rio de Janeiro state days ago, on November 18, 2011 in Rio de Janeiro, Brazil. Brazilian authorities warned US energy giant Chevron Thursday that it faces severe punishment if it fails to completely seal an offshore well that has been seeping oil in waters off Rio de Janeiro state. (LUIZA CASTRO/AFP/Getty Images)

MANAUS, Brazil — Chevron is already treading on eggshells after Brazilian authorities harshly clamped down on the US giant in the wake of a relatively small oil spill in November. Another leak at the same offshore field has now forced the company to halt production.

The company detected a "small new seep" of oil and has decided to stop production as a precautionary measure, allowing Chevron to "scientifically analyze" the causes, Jaen Williamson, Chevron's director of corporate affairs in Brazil, told Reuters.

The company said that it has found no evidence that the spills are related.

However, after a 2,400-barrel spill at the site around 200 miles off the coast of Rio de Janeiro in November 2011, Chevron faces a fine of $11 billion and potential prison sentences for executives.

Read more: Chevron says it will clean up Brazil spill

Many have suggested that the punishment is disproportionate, claiming that authorities are keen to send a message to other firms hoping to profit from the oil-rich region.

State oil company Petrobras is investing $225 billion over the next five years and the government would like to keep tabs on the foreign companies soaking it up.

This latest spill amounts to less than a barrel a day and the company has said that it is being captured. The oil could be coming from cracks in the ocean floor close to the well, rather than the well itself, the BBC reported citing Brazil's oil regulators.

Analysts are concerned that this zeal to clamp down on polluters may backfire and ultimately hamper Brazil’s hopes to push oil output to 7 million barrels per day by 2020 — a target which, if reached, would usurp the United States’ position as the world’s third largest oil producer after Russia and Saudi Arabia.

The spills took place in the Frade field, in the oil-rich Campos basin, currently the source of more than 80 percent of Brazil’s output.

http://www.globalpost.com/dispatches/globalpost-blogs/que-pasa/second-chevron-oil-spill-brazil-halts-production