Chevron Nears $150 Million Settlement in Brazil Spill Case

From Chicago Tribune

By Jeb Blount

Chevron Corp would be willing to pay about 300 million reais ($150 million) to settle lawsuits in Brazil over an offshore oil spill last year, a senior executive and a federal prosecutor said on Friday.

The talks over a possible settlement reinforce expectations of a swift resolution for Chevron, the No. 2 U.S. oil company, and its drilling contractor Transocean Ltd .

“We could have an agreement before Christmas,” Gisele Porto, the prosecutor responsible for the case, said after a public hearing.

She said she is drafting a settlement for a total of 311 million reais.

The companies face up to $20 billion in damages and some of their executives face jail terms of up to 31 years in the largest environmental prosecution in Brazil’s history. Porto said a judge is unlikely to accept the steep fines sought by the prosecutor who first filed the charges.

Courts have also overturned drilling bans against Chevron and Transocean in recent months, allowing the companies to resume operations in Brazil, home to some of the world’s largest offshore oil discoveries of the past decade.

Using settlements following larger spills in the United States like the Exxon Valdez and the Deepwater Horizon disaster in the Gulf of Mexico as a benchmark, Chevron lawyers calculated environmental damages of 30 million reais would be reasonable in the Brazil case.

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