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Chevron To Halt Oil Production Due To 'Small New Seep' In Brazil

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3/16/2012 1:09 AM ET

Energy giant Chevron Corporation (CVX: Quote) says its subsidiary Chevron Brasil Upstream Frade Ltd. has filed to temporarily halt production operations in Brazil after "a small new seep" was identified at the Frade Field in the Campos Basin on Thursday.

The decision was endorsed by Chevron's partners. The company said it had filed its request before Brazil's oil regulator National Petroleum Agency (ANP) and added that it anticipated a response in a short time-frame.

A major oil leak was discovered at the same field in November, resulting in a $11-billion civil lawsuit. Following an order in December from ANP, Chevron suspended water reinjection in four wells in the field.

The U.S.-based company said it had decided to request ANP permission for the temporary shutdown of production as "a precautionary measure based on very recent information on a small new seep in the field and subsidence in the area."

It also said it would conduct "a comprehensive technical study and prepare a complementary study to better understand the geological features of the area, working with our partners and seeking necessary approvals from ANP."

BBC quoted ANP as saying that it would impose a new fine on Chevron, one of the world's leading integrated energy companies, for failing to prevent this latest spill.

The largest foreign run oil field in Brazil, Frade field currently produces approximately 60,000 barrels a day.

Chevron has a 51.74 percent operating interest in the Frade Field. Other partners in the project are Petróleo Brasileiro S.A. - Petrobras, and Frade Japão Petróleo Ltd.

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by RTT Staff Writer

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