Brazil Regulator: No Decision Yet On Fines In Petrobras Oil Spill

Published: Feb 02, 2012

RIO DE JANEIRO (Dow Jones)--Brazil's lead environmental regulator has not yet slapped state-run oil company Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, with any fines related to an accident earlier this week that spilled 160 barrels of oil into the Atlantic Ocean, a spokesman said Thursday.

The Brazilian Institute for Environment and Renewable Resources, or Ibama, "hasn't yet taken a position [on possible fines], nothing has been defined," a spokesman for the regulator said. The spokesman called local press reports that Ibama had already decided to levy a 50 million Brazilian reais ($29 million) fine, the maximum allowed under Brazilian law, "speculation."

The environmental regulator, however, is awaiting a report from Petrobras that could result in some form of punishment. Ibama said late Wednesday that it had given Petrobras five days to submit a report on its response to the accident, including details on actions required under the emergency plan that was part of the environmental license for the field.

"Depending on the information to be presented, the company could receive sanctions," Ibama said in the statement.

Ibama officials are currently accompanying the investigation and recovery work of accident, the spokesman said.

Petrobras was conducting a long-term well test at the Carioca Nordeste field when the accident took place. Ibama said there was no danger of the spilled oil reaching the coast, given the distance to the coast and current ocean conditions. The field sits more than 300 kilometers off the coast in an area known as the Santos Basin, where a cluster of oil discoveries were made that are estimated to hold 50 billion barrels of crude.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com