UPDATE 1-Chevron Brazil head can leave when job ends, says court

Thu Sep 6, 2012 1:15am IST

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* Court requires outgoing executive to pay $245,000 bond

* Chevron Brazil chief leaving for new job in Houston

* Incoming chief Portuguese-speaker with Chevron Angola

By Jeb Blount

RIO DE JANEIRO, Sept 5 (Reuters) - The head of Chevron Corp's Brazilian unit, George Buck, can leave the country when his job ends later this month as long as he pays a 500,000 real ($245,000) bond to assure his participation in court cases related to a November oil spill, a Brazilian court ruled.

Buck will be replaced by Kelly Hartshorn, head of Chevron's deepwater operations in Angola, a person with knowledge of the appointment said. The source declined to be named because he has not been authorized to speak about personnel matters.

According to Rio de Janeiro federal court documents, Buck will take up a job in Houston in Chevron's drilling and completions department.

Buck and 16 other executives and employees of Chevron and drill-rig owner Transocean Ltd have been charged with crimes related to an offshore oil spill northeast of Rio de Janeiro.

"I believe we have built a safety culture and implemented sustainable processes," Buck wrote in a farewell letter to Chevron employees obtained by Reuters. "I'm confident that with time Chevron Brasil will recover and maintain a solid business in Brazil."

The criminal charges against the executives, employees and companies carry potential jail terms of up to 31 years. Chevron and Transocean also face a civil lawsuits seeking about $20 billion in damages and face an injunction that could bar both from operating in Brazil in less than a month.

The civil lawsuit seeks the largest ever Brazilian environmental damages settlement.

The civil and criminal charges stem from a 3,000 to 4,000 barrel oil leak in the Frade field, about 120 km (75 miles) off the coast of Rio de Janeiro state.

Chevron owns 52 percent of Frade and is the operator. Brazil's state-led Petrobras owns 30 percent and Japao Frade, a group owned by Japan's Sojitz Corp and Inpex Corp, own 18 percent. Petrobras, and Japao Frade have not been charged or named in the civil suits.

The criminal charges include: failure to realize protocols to contain the leak; failure to take steps to kill the well and stop the drilling process; breach of licenses, legal norms and regulation, including altering documents; and failure to meet legal and contractual duties.

The spill was less than 1/1000th of the size of BP's 2010 Deepwater Horizon disaster in the Gulf of Mexico. No oil ever reached shore. According to a report on the spill by Brazil's petroleum regulator, the ANP, there was no discernable ecological damage.

The ANP said the companies failed to follow procedures but did not accuse Chevron or Transocean of negligence.

Chevron and Transocean both consider the civil and criminal charges to be without merit and are fighting them in court. Chevron shut down all operations at the Frade field in March after more oil was found in the area and Chevron could not determine the source.

Buck, who had planned to stay in Brazil for three years has now been in the country for three and a half years, a period that saw the Frade field, which Chevron has been looking at for more than two decades, finally produce oil. It reached more than 70,000 barrels a day before the November spill.

In the wake of the spill, Buck and Chevron were accused of poor communication, a situation amplified by Buck's poor command of Portuguese, Brazil's official language.

Hartshorn has been working in Angola, also a former colony of Portugal, and she speaks Portuguese.

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