In this handout image provided be the U.S. Coast Guard, fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon in the Gulf of Mexico on April 21, 2010 near New Orleans, Louisiana. An estimated 206 million gallons of crude oil have spilled into the gulf from accident. Multiple Coast Guard helicopters, planes and cutters responded to rescue the Deepwater Horizon's 126 person crew.
Credit: U.S. Coast Guard

An oil spill at an offshore drilling project in Brazil's waters sparked a bit of tension last week between Brazil and Chevron, the major US oil company.  

Brazil's federal police said it would investigate Chevron responsibility for alleged pollution spewing from the well, which was deep underwater.

Chevron last week said it was cooperating with authorities, but admitted nothing.

That's how companies do it.

But then on Monday, on Monday even, Chevron, somewhat uncharacteristically, said it would take full responsibility for the oil spill off the coast of Brazil. Just like that.

"Chevron takes full responsibility for this incident," Buck told reporters in Rio de Janeiro. "We will share the lessons learned here in the hope that this sort of incident won't happen again in Brazil or anywhere else in the world."


This is important for two reasons. 

First, it's an important litmus test for Brazil's relations with foreign companies. Brazil has shown that it's not afraid to get tough. It's unclear what happened in discussions with Chevron, but last week looked a little bit like a showdown, and Brazil has come out on top.

It's important for Brazil to show that it's not going to play the typical emerging market game, if it wants to be a real player. 

Second, the spill — estimated at around 1,600-2,640 barrels per day for the eight days the oil was seeping — and its containment, will be another example of the dangers of deepwater drilling. In the past, this kind of aggressive drilling hasn't worked out so well

In Brazil, oil companies have been drilling more than four miles beneath the surface of the water, at depths reachable only by submersibles.

When equipment fails, or other problems occur, it's costly and time consuming to offer a quick fix.

But they need to do it if they want the oil. Much of Brazil's oil can only be accessed through deepwater drills.

And according to Bloomberg, the country could produce about 7 million barrels per day by 2020. That would make Brazil the third largest oil producer after Russia and Saudi Arabia, and give Brazil's already significant economic power an even greater boost.

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