Tag Archives: Transocean

OIL SPILLS: Brazil’s federal police seek to indict Chevron, Transocean officials

By Bruno Marfinati and Reese Ewing

SAO PAULO, Dec 21 (Reuters) – Federal police in Brazil on Wednesday 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 on Wednesday 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.

Source: http://af.reuters.com/article/energyOilNews/idAFL1E7NM0AK20111222?sp=true


Leave a comment

Filed under Clipping, News

OIL SPILL | Transocean slammed over Admiralty defence

Deepwater Horizon on fire (photo USCG)

CONGRESS and the White House have rebuked Transocean’s move to use 160-year-old admiralty law in an effort to insulate itself from Deepwater Horizon damage claims.

In court documents filed on 13 May, Transocean sought to invoke the Limitation of Liability Act of 1851 to limit its damages to $27M, the estimated value of the Transocean interest in the offshore rig when it blew up on 20 April, killing 11 people and causing a huge spill.

At a Capitol Hill hearing yesterday on liability issues, Oregon Democratic Senator Ron Wyden chastised Transocean for trying to limit its liability and asked Associate Attorney General Thomas Perrelli to comment on the strategy.

“I can’t say it’s illegal, but it’s certainly unacceptable, given the tragedy that happened in Gulf [of Mexico],” Perrelli answered.

Wyden also questioned Transocean’s plan to distribute $1Bn to shareholders despite the disaster, wondering how that would affect the company’s ability to pay claims. But Transocean noted that it has insurance to cover the rig and other claims.

Also yesterday, at a US District Court hearing in Houston, where Transocean filed its petition, attorneys alleged that negligence by BP and Transocean would make the old law inapplicable, Bloomberg reported.


1 Comment

Filed under News, Photos

OIL SPILL | Transocean invokes 1851 law to limit damages

TRANSOCEAN Holdings is invoking 160-year-old US admiralty laws to limit its exposure to damage claims relating to the Gulf of Mexico oil spill.

Court documents filed in the federal court in the Southern District of Texas show that Transocean, as owner of the mobile offshore drill ship Deepwater Horizon, will rely on the Limitation of Liability Act of 1851 to limit its damages to $27M. This is the estimated value of Transocean’s interest in the vessel at the time of the blast on 20 April.

The act was enacted by Congress to give US shipowners a chance to compete with foreign-flagged vessels that had limited liability under European seafaring laws. It also provided shipowners protection at a time when shipping was considered a high-risk venture.

Despite lawsuits likely to reach into the billions of dollars against Transocean, among others, the company said in its filing that Deepwater Horizon was “seaworthy, tight, staunch, strong, and properly and sufficiently manned and supplied”.

It also said any personal injury, death or physical damage was not the company’s fault.

1 Comment

Filed under News

BP OIL SPILL | Disaster hits shipping, too

By Lloyds List Comment (2010/05/03)

THE disaster unfolding in the US Gulf and threatening the Louisiana, Mississippi and Alabama coastlines has been dubbed by President Obama a “potentially unprecedented environmental disaster”. BP, struggling mightily to seal the gushing well, is faced with a diabolically difficult task as the looming environmental catastrophe draws closer by the hour.

BP was actually leasing the well from Transocean, which owns the rig, and it initially sought to make Transocean accountable. BP’s senior managers soon grasped that it was liable for the cleanup and the environmental damage.

The wavering aside, BP’s distress is understandable, and as a shipping journal we sympathise with its sudden plight.

We can be forgiven for an initial reaction of “thank God this did not come from a ship”. The likely course of events would have been instant calls for more stringent measures against owners with a knock-on effect of tighter regulation, higher insurance premiums and, within the bounds of possibility, a new tax on shipping. Yet, the relief is short-lived, because the magnitude of the disaster will make it a shipping problem.

The two relevant international funds covering oil pollution from tankers are the International Convention on Civil Liability for Oil Pollution Damage and the International Oil Pollution Compensation Funds.

Influenced by the 1999 Erika and 2002 Prestige oil spills, and mounting costs of clean-ups generally, a protocol came into force in 2005 providing for an IOPC Supplementary Fund to increase the compensation under the CLC. The total amount of compensation payable for one incident is limited to special drawing rights of about 750m, or around $1bn at current conversion rates.

No one can yet estimate the full liability to be shouldered by BP, but each major spill brings an increase in claims and liability pricetag.

The Erika casualty brought 7,100 claims amounting to $520m. Prestige yielded 1,300 claims worth $1.7bn. The 2007 Hebei Spirit spill brought 126,000 claims worth $43.2bn.

Environmentalists dub the funds’ contribution to clean-ups as inadequate. Claims are settled with only a portion of IOPC Fund, because the fund provides compensation for the economic cost of the cleanup and the loss of income by those affected by the oil spill. P&I clubs foot the rest of the bill.

Environmentalists argue that both should be tapped to cover for environmental damage. As the impact of the Gulf spill builds, so too will pressure on shipping to bear additional cost of future cleanups.


Filed under Lloyd's List, post