12/24/2011 10:58 EST | Updated 02/23/2012 05:12 EST

Brazil slaps Chevron Corp. with $5.4 million fine for oil leak

SAO PAULO - Brazil's environmental protection agency has slapped a new fine on Chevron for what it says was the U.S. oil company's poor handling of a spill last month off the coast of Rio de Janeiro state.

Chevron was fined 10 million reals ($5.4 million) due to an alleged "breach of its environmental license" — It did not have the necessary equipment and was slow to respond when the leak was detected, the agency announced Saturday on its website.

Chevron did not immediately respond to an emailed request for comment.

The government agency had already fined Chevron Corp. 50 million reals ($27 million) for the oil spill, which began at the site of a Chevron appraisal well Nov. 7, about 230 miles (370 kilometres) off the northeastern coast of Rio de Janeiro state. Transocean Ltd. is the drilling contractor for the well.

Earlier in the week, federal police asked that prosecutors charge Chevron and Transocean with crimes against the environment. Authorities also asked that charges be filed against 17 people for allegedly failing to provide information to the police.

Among those cited is George Buck, chief operating officer for Chevron Corp.'s Brazilian division. If indicted and convicted, he and the others could face jail terms of up to 14 years each.

Buck has not personally responded to the allegation, but Chevron said the indictments sought were without merit.

"We will vigorously defend the company and its employees," the company said Thursday in an emailed statement. "Chevron is confident that once all the facts are fully examined, they will demonstrate that Chevron responded appropriately and responsibly to the incident."

A federal prosecutor also has filed an $11 billion lawsuit against Chevron Corp. because of alleged environmental harm caused by the leak.

"During an investigation, the attorney general's office found that Chevron and Transocean were not capable of controlling the damage caused by the spill of nearly 3,000 barrels of oil, proof of a lack of environmental planning and management by the companies," said a statement from the prosecutor's office.

Chevron has said the spill occurred because the company underestimated the pressure in an underwater reservoir.

Most of Brazil's oil drilling is conducted offshore, and that is where Chevron's work is concentrated. The company does own lubricant-manufacturing plants in Rio de Janeiro and Sao Paulo. It wasn't clear if these operations would be affected by any decision a judge makes on the federal prosecutor's lawsuit.