UPDATE 1-Chevron Brazil field restart seen at 20,000 bbl/day -ANP

Mon Apr 15, 2013 4:33pm EDT

Related Topics

* Chevron closed field in March 2012 after November 2011 spill

* ANP says issued Frade restart safety documents on Monday

* Field output to lag pre-spill levels for lack of injection

By Rodrigo Viga Gaier

RIO DE JANEIRO, April 15 (Reuters) - Brazil's oil regulator said on Monday that it expects Chevron Corp, the No. 2 U.S. oil company, to restart output from its offshore Frade field northeast of Rio de Janeiro at about 20,000 barrels a day.

The field was shut in March 2012 after a November 2011 oil spill. While the ANP announced on April 8 that Chevron and its partners had received approval to restart output at Frade, production has not yet begun, Magda Chambriard, the ANP's chief, told reporters in Rio de Janeiro.

Final documents allowing a restart was issued today, she added.

Production at Frade will be well below the 70,000 barrels a day output at the field before the spill. The reason, Chambriard said, is because Chevron and its partners have not been given permission to use water or gas injection to increase the flow of oil from the reservoir.

Chevron stock fell 2.8 percent in New York, on track for their biggest one-day gain in more than five months.

Small droplets of oil are still leaking from the field, Chambriard said. Oil leaked after a crack opened up when a well drilling and pressure accident, known as a "kick," fractured fragile rock in the well walls and allowed oil to seep up to the seabed and then to the surface, according to a 2012 ANP report.

The leaks "are still very small; they are going to be collected," Chambriard said. "At this point it's good to produce oil because it reduces reservoir pressure."

The small leaks are why the ANP has not authorized the use of injection to raise output, she said.

Frade is 52 percent owned by Chevron, 30 percent by Brazil's state-controlled oil company Petroleo Brasileiro SA and 18 percent by Frade JapĆ£o, a group made up of Japanese trading houses Sojitz Corp and Inpex Corp. Chevron leads the group as operator.

The 3,800 barrel November spill and much smaller leaks later, led to the March 2012 shutdown of Frade. It also led prosecutors to launch civil suits against Chevron and its drilling contractor Transocean Ltd. Criminal charges against the companies and 17 of their employees were also launched but later dropped.

The ANP said the spill did no discernable damage to the environment and never came close to Brazil's coast, the ANP said. No one was injured in the spill. Chevron and Transocean have said they have done nothing wrong and are fighting the charges.

No charges or lawsuits were launched against Chevron's partners in Frade.

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