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Brazil readies contingency plan for oil spills
October 23, 2013, 8:46 am


The Libra oilfield auction has been criticised due to the lack of a contingency plan [AP]

The Brazilian government has announced a contingency plan to deal with oil spills one day after the Latin American nation auctioned the exploration rights to its prized Libra oilfield.

The plan will be activated only when corporate action is not enough to contain oil spills or when spills go beyond Brazilian borders, the government said after Brazilian President Dilma Rousseff signed the plan into law late Tuesday night.

Representatives from several Brazilian ministries would be part of an agency that would monitor and prepare for “response capacity to oil-polluting incidents.”

The Libra oilfield is poised to become one of the largest oilfields in the world. Two Chinese energy firms have won a 35-year production sharing contract to develop the pre-salt oil discovery.

Libra holds an estimated eight billion to 12 billion barrels of recoverable oil, according to both Brazil’s oil regulator ANP and Dallas-based oil-reserve certification company Degolyer & MacNaughton.

The Libra oilfield auction has been criticised for several reasons, including the lack of a contingency plan.

Brazilian prosecutors wanted 40 billion reais ($18 billion) in damages for a 3,600 barrel leak in 2011 in the Frade offshore oil field north of Rio de Janeiro operated by US oil giant Chevron.

The case was the largest-ever environmental lawsuit in Brazilian history.

The damages sought were many times larger than US courts awarded plaintiffs against operator British Petroleum in the much larger 2010 Deepwater Horizon spill.

Source: Agencies