Oil companies are having trouble hiring foreign workers crucial to Brazil’s booming offshore oil industry because of criminal and civil cases against Chevron Corp. and Transocean Ltd. employees, the head of an industry association said on Monday.
Some prospective workers needed to operate high-tech drill rigs and other offshore oil equipment want guarantees of a swift exit from Brazil in case of an offshore spill, Joao Carlos de Luca, president of the Brazilian Petroleum Institute, said at a Rio de Janeiro conference on the country’s investment risks.
“Some companies had to make amendments to work contracts, offering helicopters and open plane tickets so their workers can leave the country immediately if there is an accident,” Mr. De Luca said. “With the absence of rights auctions and the repercussions from the Frade spill, it was a very bad year for the Brazil oil business.”
The Chevron-Transocean criminal and civil lawsuits from the November 2011 Frade oil spill are one of the latest problems for the once-galloping industry. It also faces changes in the law, a lack of new lease auctions, royalty disputes and the inability of companies to comply with government mandates to use local goods and services.
A shortage of skilled labour also means Brazil needs specialized foreign workers for the industry.
The decision to seek nearly $20-billion in civil damages from Chevron and Transocean and then press criminal charges against 17 Chevron and Transocean employees sent fear through Brazil’s growing community of foreign oil workers earlier this year. The criminal charges against the two companies could carry jail terms of up to 31 years.
Workers fear their passports, like those of the Chevron-Transocean 17, could be seized, forcing them to remain in the country, perhaps for years, captive to Brazil’s notoriously slow justice system.
Amid the “excessive” legal prosecutions, Mr. De Luca said workers’ concerns are understandable, but may be overblown.
While many of the worried workers are highly sophisticated technicians, he added, they may not fully understand how Brazil works. Some of them “are not culturally sophisticated,” Mr. De Luca told the audience at the conference at Rio de Janeiro’s Federation of Industries.
Courts have allowed many of the Chevron-Transocean 17 to travel to visit family, take vacations or even accept new jobs, as long as a 500,000 real ($240,000 U.S.) bond is posted.
At one point, some oil drill rig operators even considered not bringing any more rigs to Brazil, he said, but these employers and their largely foreign crews are now less worried about working in Brazil.
“I think things are accommodating and returning to normal,” Mr. De Luca said.
Mr. De Luca did not name companies facing difficulties hiring workers, though the bulk of Brazil’s deepwater offshore drilling rigs are owned and operated by foreign companies such as Transocean and Ocean Rig UDW Inc. Such companies, which also do the bulk of offshore drilling worldwide, work on contract to operators such as state-led Petrobras and Chevron.
The 3,600-barrel Frade spill was far less severe than other recent offshore accidents. More than five million barrels of oil were spilled in the 2010 Deepwater Horizon disaster in BP PLC’s Macondo field in the Gulf of Mexico. Eleven people died in the Macondo accident, and beaches and fishing grounds were polluted.
On Nov. 15, BP agreed to pay a record $4.5-billion in penalties and plead guilty to criminal misconduct for the spill.
No workers were hurt in the Frade spill, and oil never came near shore. Brazil’s oil regulator, the ANP, said there was no discernible environmental damage from the spill.
Frade is operated by Chevron, which has a 52-per-cent stake. Petrobras owns 30 per cent, and Frade Japao, a joint venture between Japan’s Sojitz Corp. and Inpex Corp. trading houses, holds 18 per cent.