Brazil's National Oil Regulator (ANP) said on Wednesday that it is suspending the drilling rights of US oil major Chevron in national territory until it clarifies conditions of the recent oil spill in its Frade field.
The ANP also said it has denied Chevron's request to drill into ultra-deep sub-salt areas, which hold huge deposits of oil off Brazil's coast.
More than 2.400 barrels leaked into the Atlantic Ocean about 370 kilometers off the northeastern coast of Rio de Janeiro state.
Chevron has said it underestimated the pressure of an underwater oil reservoir while drilling on Nov. 7. That allowed oil to rise up a bore hole and make its way to ocean’s surface.
Regulators say the leak is now under control.
Testifying before the Brazilian congress Chevron Brazil CEO George Buck apologized for the spill but added that his company acted as rapidly and safely as possible and used all resources to contain and stop the flow of oil from the well.
We controlled the source in four days. We worked with transparency and cooperation with the authorities of Brazil, Buck told Brazilian lawmakers. Please understand that during those first days it was very confusing, very difficult to manage the flow of information.
Brazil's government slapped Chevron with a $28 million fine on Monday for causing an offshore oil spill, and the penalty could rise as the U.S. company faces a political backlash over the accident.