(Updates with comment from Chevron in third paragraph.)
Nov. 23 (Bloomberg) -- Chevron Corp., operator of the $3.6 billion Frade oilfield off the Brazilian coast, is blocked from drilling in the country while a recent spill is examined, the South American country’s oil regulator said.
Chevron’s “negligence” contributed to the spill and the company needs to pay more attention to safety precautions, the Agencia Nacional do Petroleo, or ANP, said today in an e-mailed statement. The ban will remain in effect until the regulator identifies the causes of the spill and considers it safe to resume drilling, ANP said.
The company “will adhere to all the rules and regulations of the government of Brazil and its agencies,” Lloyd Avram, a spokesman, said in an e-mail. Chevron, based in San Ramon, California, continues production from the field, he said. The stock dropped 2.8 percent to $93.75 at the close in New York.
Brazil is sanctioning Chevron at a time other foreign oil companies such as BP Plc, Statoil ASA and Royal Dutch Shell Plc are accelerating exploration in deep waters off the coast of Brazil. The nation expects production to double during the next decade as it develops the largest oil discoveries in the Western Hemisphere since 1976.
Chevron was fined 50 million reais ($27 million) by Brazilian environmental authorities for the Nov. 7 spill in deep waters off the coast of Rio de Janeiro. It will be fined for falsifying information to ANP and for failing to meet a plan to counter the accident, the regulator said yesterday.
An estimated 3,000 barrels leaked, Haroldo Lima, head of the ANP, said yesterday.
Chevron, the third-largest oil producer in Brazil after state-controlled Petroleo Brasileiro SA and Shell, operates Frade with a 51.74 percent stake. Petrobras holds a 30 percent stake and Frade Japao Petroleo Ltda., a joint venture including Inpex Corp. and Sojitz Corp. holds 18.26 percent.
The regulator’s press office didn’t return phone calls seeking comment on the order.
--With assistance from David Wethe in Houston. Editors: Tina Davis, Charles Siler
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