* Spill illustrates risks in tapping offshore frontiers * One of two by U.S. companies in foreign ops this year By Kristen Hays Nov 23 (Reuters) - Chevron Corp's efforts to contain an oil spill at its prospect offshore Brazil appear to have worked, but it is too early to say whether the accident is a major setback for offshore producers that push technological limits to tap crude, experts said. "This is not something that's going to encourage people to give kudos to the industry for safety," said Nansen Saleri, CEO of Quantum Reservoir Management in Houston and former head of reservoir management for Saudi Aramco. "It's definitely not in the positive column. How negative it is depends on how Chevron and Petrobras manage the situation," he said. Petrobras is Chevron's partner in the Frade project about 99 miles (160 km) off Brazil's shore, but Chevron is the operator. Don Van Nieuwenhuise, the University of Houston's director of petroleum geoscience programs, said Chevron's response shows ability to tackle problems. "They did everything they could do and so far, from what I understand, the amount of damage is minimal and they're working very hard to fix it," he said. This week Brazil fined Chevron $28 million for causing the spill, which the nation's National Petroleum Agency said reached 200 to 330 barrels of oil per day at its height. Chevron estimated a total of 2,400 barrels leaked. While that's much less than the more than 4 million barrels of oil that spewed from BP Plc's runaway deepwater Macondo well last year, Chevron's accident illustrates risks involved with tapping offshore crude at great depths. WHAT HAPPENED? Chevron said the spill occurred because the company underestimated pressure in the reservoir and overestimated strength of the rock through which they drilled. The incident occurred on Nov. 7 after the drillbit hit an unexpected pressure spike, causing oil and drilling mud to rush up the wellbore, Chevron said. Chevron shut a blowout preventer atop the well to stop the flow, but that force could have fractured brittle rock along the wellbore, giving oil a sideways route out to natural upward crevices, Van Nieuwenhuise said. Gulf of Mexico rock layers are generally more pliable, prone to give in a similar scenario, he said. He said offshore producers study seismic and other data about rock layer formations before drilling to avoid pressure pockets. Sometimes engineers miss a pocket or it doesn't show up on the data. Saleri said companies manage unexpected kicks by circulating drilling mud, or a mixture of barite, clay and water that is heavier than oil, and perhaps cement to hold back the crude. Chevron said its mud was too light. "Particularly with gas pockets in shallow horizons, it happens everywhere both in the states and overseas," he said. "There are ways of responding to it. The blowout preventer is a step, but it is a last resort." NOT THE ONLY ONE Similar incidents recently have affected other oil companies elsewhere. A ConocoPhillips offshore operation in northern China's Bohai Bay sprung two leaks in June. The first happened when the company injected water into a well to boost oil production, overpressurized some reservoir layers, and created cracks to a fault through which oil and drilling seeped out. The company reduced injection operations and the fault sealed itself, spokesman Rich Johnson said. The second leak, like Chevron's, occurred after ConocoPhillips unexpectedly drilled into a pressure zone. The company shut the well, increasing pressure in some higher layers that opened cracks for oil and mud to seep out. ConocoPhillips plugged and sealed the well. Overall, the company said about 700 barrels of oil and 2,500 barrels of drilling mud leaked into the bay over more than two months.