Brazil says new Chevron oil leak off coast

[March 16, 2012]  SAO PAULO (AP) -- Oil started leaking again from cracks on the ocean floor near an offshore Chevron well where at least 110,000 gallons (about 416,000 liters) spilled late last year, Brazil's oil regulator said Thursday.

The size of the new leak, which is ongoing, is unknown, said a spokeswoman with Brazil's National Petroleum Agency, known as ANP. She said the leak was detected because an oil slick appeared on the ocean surface.

"The oil is not coming from the well; it's been sealed. It seems to be coming from fissures on the ocean floor near the well," the spokeswoman said.

She spoke on condition of anonymity, saying she was not authorized to discuss the matter.

The new leak is another challenge to safely extracting oil from the offshore finds Brazil has seen in recent years. It's estimated at least 50 billion barrels of oil lie off Brazil's coast, the biggest discoveries in the Americas in three decades.

ANP said in a statement it would fine Chevron an undisclosed amount for failing to prevent new seepage. The company is already facing more than $100 million in fines from the earlier leak.

Last year, the regulator banned Chevron from drilling activities in Brazil following the first offshore leak, pending the results of an investigation, which the ANP said earlier this week was complete but they've yet to release.

Chevron confirmed in a statement that there was a "small new oil seepage" and that it was working to collect the crude.

The company said it asked ANP for permission to halt all production activities in the field where the leak occurred. Chevron said it wants to conduct a "comprehensive technical study" to better understand the reservoirs where it's drilling.

Oil started leaking from cracks on the ocean floor at the site of a Chevron appraisal well last Nov. 7, about 230 miles (370 kilometers) off the northeastern coast of Rio de Janeiro state. About two weeks later, ANP said that leak was under control.

Experts had warned, however, that there was a high risk of oil seepage resuming.

George Buck, chief operating officer for Chevron's Brazilian division, said then that the spill occurred because Chevron underestimated the pressure in an underwater reservoir.

He said that caused crude oil to rush up a bore hole and eventually escape into the surrounding seabed. The oil leaked through at least seven narrow fissures on the ocean floor, all within 160 feet (50 meters) of the wellhead.

The work at the Frade field in the Campos Basin where the leaks occurred is among Chevron's "biggest capital investments," according to the company's website, which didn't provide details.

The company was criticized by officials at the ministry and the regulatory agency for not fully sharing information about the spill in its early days, and of not having proper emergency equipment to handle the spill.

[Associated Press; By BRADLEY BROOKS]

Associated Press writer Stan Lehman contributed to this report.

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