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Strategies & Market Trends : Telebras (TBH) & Brazil
TBH 0.423-6.1%3:53 PM EST

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To: Art Baeckel who wrote (21196)8/1/2000 8:01:01 AM
From: Art Baeckel  Read Replies (1) of 22640
 
UPDATE 1-Brazil's Petrobras reports new
leak

Reuters Company News - July 31, 2000 15:43

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(Adds environmental officials, paragraphs 6, 7)

RIO DE JANEIRO, July 31 (Reuters) - A Brazilian pipeline ruptured over the
weekend spilling close to 270 gallons (1,000 litres) of the toxic fuel additive
MTBE, the latest in a series of oil industry accidents this year, state oil giant
Petrobras said on Monday. MTBE, the industry acronym for methyl tertiary
butyl ether, is a toxic substance often added to gasoline to boost combustion
rates. It is known to cause cancer in animals. Residents in Paracambi, a town
about 44 miles (70 kilometres) northwest of Rio de Janeiro, complained of
nausea and a strong chemical smell on Saturday. Petrobras said it immediately
shut down the OSRIO pipeline that runs between Brazil's "steel city" of Volta
Redonda, 84 miles (135 kilometres) northwest of Rio, and Japeri, which
neighbours Paracambi. Petrobras said the company discovered a small hole in
the pipe on Sunday, and that there is only a "minimum chance" of the leak
contaminating ground water. Rio de Janeiro's state environmental secretariat
said it will fine Petrobras up to 1 million reais ($560,000) depending on the
extent of damage.

Officials are testing ground water in the area for contamination but said that
initially it appears that Petrobras contained the leak. They said the local
population is not at risk because they pipe water in from a reservoir. The latest
accident comes on the heels of a series of embarrassing oil spills by Petrobras
that have infuriated residents and environmentalists. Just two weeks earlier, an
underwater pipeline at a Petrobras refinery split, oozing 1 million gallons (4
million litres) of crude into a southern river in Brazil's biggest oil spill in 25
years. That spill was Petrobras's third oil accident this year.

Environmental authorities slapped a 50 million-real ($28 million) fine on the
state oil giant for that blunder. Petrobras said on Monday it would remove and
treat all of the contaminated soil around the spill in Paracambi and replace it
with new soil. MTBE has come in for criticism in the United States, where
some lawmakers are pushing for it to be phased out after the fuel additive was
found in ground water.
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