No one wins if Brazil suspends Chevron from drilling following an oil spill off the Rio de Janerio coast, MercBloc President Dan Dicker said Wednesday.
Brazilian regulators reportedly halted the company’s privileges in connection with the spill, which began Nov. 7. They also denied a Chevron request to drill deep-sea subsalt areas in the Frade region.
Chevron said it had not yet received official word of any punitive action.
“In some ways, the Brazilians are losing out if they actually ban Chevron from working through the subsalt, which might hold as much as 200 billion barrels of oil,” Dicker said on “Fast Money.”
By comparison, Saudi Arabia’s reserves hold approximately 250 billion barrels, and the Bakken shale in the United States holds some 20 billion barrels.
(Related Story: No Supply Problem for Oil, Dicker Says)
News of the suspension came a day after Brazil announced it would fine Chevron $28 million for the oil spill. Penalties in the ongoing investigation could reach $140 million.
However, Dicker cautioned against buying Chevron’s competitors on the announcement. Petroleo Brasilerio and Petrobras Argentina closed down for the day 3 percent and 5 percent, respectively.
“The kind of expertise that Chevron has the Brazilians need, so I’m not sure there’s any winner here — just losers,” he said. “This is the most difficult oil find to get out of the ground in terms of offshore.”
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