Brazil’s oil regulator, ANP, has said that Chevron was not negligent in the drilling of a well the caused an offshore oil spill in November. ANP said the Chevron and Transocean committed operational and safety violations and that the well had design flaws, but that the mistakes do not qualify as negligence. A senior ANP official said, “Negligence is a sensitive legal term. It needs to be reserved for things that are beyond correction and improvement – and that’s not the case here.”
The finding should help Chevron to fight criminal charges and the $11-billion lawsuit stemming from the spill. Chevron and the ANP agree that higher-than-expected pressure in an oil reservoir led to the surge in the well, with ANP claiming that Chevron could have prevented the accident by reinforcing the bore hole with cement.
The lawsuit and criminal proceedings have been watched closely by investors and industry insiders as the outcome could affect oil exploration in Brazil going forward. Some are concerned that excessive penalties could scare other companies looking to do business in Brazil away while others worry that a light penalty would show a lack of regard for environmental safety.
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