Brazil Oil Regulators Order Shut-In of Chevron Wells at Frade Field

Brazil's National Petroleum Agency ordered Chevron Corp. to shut in one of its production wells after the country audited the safety of the U.S. oil major's operations in its Frade field, several hundred miles off the coast of Rio de Janeiro.

The well that was ordered shut accounts for less than 10 percent of the company's oil production in the region, according to the company's statement released late Thursday.

ANP inspectors forced the company to shut down the well, one of 11, because of the presence of hydrogen sulfide gas, said Magda Chambriard, ANP's director of operations, on the agency's website on Thursday.

Chevron explained the gas is a natural byproduct of producing oil, and that no gas leaks were found.

The closure comes on the heels of a safety audit at the Chevron facility that was conducted Nov. 23 through Nov. 25. That audit, which cost Chevron $5 million, was prompted by a November oil leak from the Frade field that seeped 2,400 barrels of oil into the ocean.

Chevron, which has claimed full responsibility for the leak, was fined $28 million over the incident. Brazilian authorities have also suspending the company's drilling operations in the region until investigations are concluded.

Apart from the production well, four other water injection wells were also ordered shut at the Frade facility.

Chevron is confident it will successfully respond to the ANP's concerns and be able to resume operation of its production and injection wells in due time, the company said in its release.

To date, the company's oil production is 79,000 barrels per day in Brazil.