Chevron faces fines, backlash over Brazil spill

* Brazil oil agency says "no comparison" with BP spill

* President Rousseff to hold meeting on spill

* Rio state threatens action against Transocean

RIO DE JANEIRO, Nov 21 (Reuters) - Chevron could be fined up to $44 million for causing an oil spill off Brazil's coast, government officials said on Monday, as the U.S. company faced a mounting political backlash over the accident.

The leak from the undersea well, owned in partnership with Brazil's state-controlled Petrobras and a Japanese consortium, had slowed to a "residual" flow and was not a "major" disaster, said Haroldo Lima, the head of the ANP agency, Brazil's energy regulator.

At its height, the leak released 200 to 330 barrels per day into the ocean following a rupture in the well's structure on Nov. 7, according to the ANP. Chevron said on Sunday that the estimate was "in the ballpark."

"There is no comparison with the Macondo spill in the Gulf where 3,000 barrels a day leaked and 11 people died. This is a serious accident but not a major one," Lima told reporters, referring to last year's disaster at BP's Macondo well.

But he said the company, which has admitted responsibility for the accident, could be fined up to 50 million reais ($28 million) by the federal government. Rio could impose an additional 30 million reais in fines, the state's environment secretary said.

Despite the relatively small size of the leak, Chevron is facing political and regulatory fallout over the accident, which has raised questions about safety and environmental risks in Brazil's growing offshore industry at a time when states are quarreling over royalty revenues.

Federal police are investigating the spill, and the oil major was summoned on Monday to explain it to a congressional committee. President Dilma Rousseff will discuss the oil spill, which authorities estimate at about 3,000 barrels, in a meeting later on Monday with her environment and energy ministers.

Energy companies in Brazil are testing the limits of drilling as they seek oil at depths as much as 7 kilometers (4.4 miles) below the ocean surface, putting equipment and people under strains often compared with those for space flight.

Brazilian oil companies expect to produce about 7 million barrels of oil per day by 2020, most of it from offshore near Rio de Janeiro, an amount that would make Brazil the third-largest oil producer after Russia and Saudi Arabia.

The so-called subsalt region is the size of New York state and is believed to hold more than 50 billion barrels that could help power Brazil's drive to developed-nation status. But its development comes at a time when opposition to offshore drilling is growing worldwide in the wake of the estimated 4 million barrel BP Deepwater Horizon spill.

$28 MILLION FEDERAL FINE POSSIBLE

Chevron CEO George Buck said at a news conference in Rio on Sunday that the company took full responsibility for the accident and intends to fully clean up the spill.

He said the company had underestimated the amount of pressure in the offshore oil reservoir being targeted and overestimated the strength of undersea rock through which they were drilling.

As a result, high pressure oil was able to leak into the well borehole, overcoming a liquid sealant and well cleaning fluid known as "mud." Because of the low pressure estimate, the mud was mixed "too light" to keep the oil under control.

The well structure cracked and oil seeped through rock to the sea floor. From there, it bubbled more than a kilometer up to the ocean surface.

The company says the "sheen" on the ocean surface caused by the leak now totals about 18 barrels and is 120 km (75 miles) off the Rio coastline, moving further out to sea.

Chevron has come under criticism in Brazil for failing to provide an immediate explanation for the spill and for not initially offering a clear estimate of how much oil has leaked into the ocean.

Rio state's environment secretary, Carlos Minc, said his state could impose additional fines of between 10 million and 30 million reais. Minc also said Rio might cancel firms' operating licenses, including that of Transocean, which drilled the well for Chevron and also owned the drilling rig involved in the Deepwater Horizon disaster.

But Brazil's environment ministry said that Transocean's licenses were issued by the federal government and that there had been no decision to cancel them. Lima also said such a decision could not be taken by Rio.

"The state government does not have the power to stop Transocean from operating," he said. "I doubt the state government can do this. It is the job of the ANP."

The accident comes as Rio and other producer states campaign bitterly against a proposal in Congress to distribute oil royalties more widely among states. An agreement on the royalties is needed before Brazil can launch a new legal framework for development of the reserves.

One of Rio's main arguments for keeping a bigger share is that it would have to shoulder the costs of any environmental disasters.

"This incident could have been avoided. Rio will in no way be a stage for environmental impunity," Minc told GloboNews television channel.