More Investments Needed Form Offshore Inspections in Brazil

With the recent Chevron/Frade spill, which has been ongoing for over 25 days, new light was shed on the shortcomings of ANP (The national O&G regulator). To begin with the regulator has only spent around $2.5 million of its allotted $8 million budget for inspection of oil and gas E&P in Brazil. As stated by O Globo, Brazil’s leading newspaper, that amount is about what Petrobras spends yearly in coffee for its employees. Only 3% of the agencies total budged is destined for O&G inspections. All that will most likely change in the near future, hopefully. For this to change there needs to be a change of policy in the Brazilian government regarding the importance of O&G activities inspections.

The ideal situation would be for ANP to have a team of representatives on each exploration and production platform, in order to be able to follow what’s going on in each rig in real-time. That is hardly likely to happen, again unless there is a strong policy change in this respect by the Brazilian government. Sincerely with the huge amount of money involver in oil and gas E&P, it is hard to understand why this possibility of having inspectors constantly in each rig, is not even considered and as far as I know it really is not even being considered.

The Brazilian government easily has the funds to make this happen but they seem to lack the political will to take such a measure. As it is, ANP only makes periodic inspections of the rigs and trusts to the honesty of the O&G operators in order to keep abreast of what is going on, well good luck to them, because they will be needing it, with hundreds of well being drilled and even more in production. Operators are historically much more interested in profits than in environmental and worker safety and they will go to incredible lengths in order not to have to stop their production, and this usually includes taking undue risks.

It is hard to understand how Chevron was allowed to continue operating without even having a ROV capable of reaching the seafloor at 1,200 meter. I am sure their drilling rig was inspected before the accident by the ANP, yet were allowed to continue without this and even without having the necessary tools to contain and skim the oil from the surface of the ocean after the spill.

As usual there will be a increase in the thoroughness of inspections after this accident, we can only wonder how thorough this will be and how long it will last, because once the news leaves the headlines it is usually back to business and unless an independent organization is hired to oversee what is being done by the ANP, little will change.

As it is Chevron is the scapegoat and has had its drilling rights suspended in Brazil, temporarily anyway. Frade just happens to be Chevron’s only drilling concession in the country. This decision only impacts Chevrons drilling as other production of the other 13 wells in the Frade field, which produce upwards of 79 thousand barrels/day.

All the spotlight is on Chevron, but it may be supposed that may be serious problems in other E&P wells from different operators but there is no indication that the ANP is increasing their inspection tempo towards these other operators. With the high rate of deepwater drilling going on in Brazil, it is not a question of if but when the next spill will occur. At this point all we have on our side is luck and its anyones guess how long this luck is going to hold.

Claudio Paschoa