Brazil will file criminal and civil charges against Chevron (CVX, quote) and some of its local managers in response to a 2,400 barrel offshore oil spill in November.
Reuters reports that new rules have given Brazil’s government greater control over its newfound oil wealth, heightening risks for energy companies eager to explore the area.
In December a Federal Police investigator filed a report alleging Chevron and rig operator Transocean (RIG, quote) took “unacceptable” risks at the Frade oil field off southern Brazil, recommending 17 people be indicted.
As many as 12 of them are Chevron employees, reports Reuters, while Transocean and some of its employees are also expected to be charged.
Transocean is the world’s largest offshore oil rig operator, and was also involved in the infamous BP (BP, quote) Gulf of Mexico spill in 2010, which leaked more than 1,000 times more oil.
Brazil’s largest company, Petrobras (PBR, quote) owns 30% of the Frade oil field; Chevron owns 52% and is responsible for field management, the remainder is owned by Japan’s Frade Japao.
Petrobras chief Brazilian energy rival Ultrapar Participacoes (UGP, quote) was trading up slightly to $19.62 lunch time Friday, while the iShares MSCI Brazil Index ETF (EWZ, quote) was also slightly up at $65.99. Chevron shares were down over 2%.
Brazilian oil regulator ANP has suspended Chevron’s Frade drilling license and in conjunction with Brazilian environmental protection agency Ibama, has fined Chevron more than $50 million for the spill.