Reuters Chevron's oil spill off the Brazilian coast exposes the major environmental risks of tapping the country's new oil wealth and could further delay development by fueling nationalistic oil politics. The accident, for which the US oil company has taken responsibility, has quickly become politicized at a time when Rio de Janeiro and a handful of other “producer” states are campaigning bitterly against a proposal in Congress to spread the oil wealth more widely. By drawing attention to the environmental risks of exploring at such massive depths, the spill could further delay the concession of new exploration areas and increase the power of state-controlled Petrobras at the expense of other oil companies, both national and foreign. “The reality is that this spill is going to speed up the politicizing of Brazil's oil industry,” said Cleveland Jones, a geologist with the National Oil and Gas Institute at the State University of Rio de Janeiro. “We are not going to have a real discussion about the risks and benefits of offshore oil exploration, but an idiotic political discussion. The political risk is going to rise in the industry.” One of the first results of the spill could be to further delay expected sales of new oil rights in Brazil's so-called subsalt region, said Adriano Pires, head of the Brazilian Infrastructure Center, a Rio de Janeiro energy research group. Brazil has not sold new offshore oil rights in the region near Rio de Janeiro and Sao Paulo since 2007, preventing companies from expanding activities in an area already responsible for more than 80 percent of Brazil's 2.1 million barrels a day of output. The New York-sized subsalt area, which includes the Frade concession where Chevron's accident occurred, may hold 100 billion barrels of oil or more, according to a study from the National Oil and Gas Institute. That's enough to supply all needs in the United States, the world's largest oil consumer, for more than 14 years. With no new concessions to buy, many oil companies that set up in Brazil a decade ago to help develop Brazil's offshore will likely go home, Pires said. “There are many in the government who don't want to sell new concessions, even though Petrobras will by law be the leader of any new subsalt operations,” Pires said. “They've put off new sales to next year but if we now have a debate on new environmental rules for the offshore, it will be pushed off even more.” Brazil's Congress approved a legal overhaul of the oil sector last December that makes Petrobras, already the sector's dominant player, the operator of all new projects in the subsalt with the right to a minimum 30 percent stake. Chevron says the leak, which was caused by its underestimation of pressure in an offshore oil reservoir and overestimation of the surrounding rock's strength, totaled about 2,400 barrels and that it has plugged the rupture. While far smaller than the 4-million-barrel Deepwater Horizon disaster in the Gulf of Mexico in 2010, the accident highlights the technological challenges and environmental risks of tapping oil in waters up to 3 km (1.9 miles) deep and another 3 to 4 km beneath the seabed — a challenge often compared to space travel. __
