Probe Into Rig Sinking Begins

The head of Brazil's state oil giant Petrobras said on Tuesday that a European company would monitor a probe into the cause of an accident that sank Petrobras' biggest oil rig and killed 11 earlier this month.

Yet again, Petrobras President Henri Philippe Reichstul rebuffed accusations of negligence by the company's top management, but pledged to punish those responsible for the blasts that destroyed the Reichstul said in his testimony in the Senate that Norwegian classification agency Det Norske Veritas -- the world's biggest body responsible for surveying and verifying seaworthiness -- would provide an independent report on the investigation into the causes of the accident.

"For us, it is a matter of honor... and we will spare no effort to find out what happened and punish those responsible, but we have to wait till April 20 to get the results of the investigation," Reichstul said. Also on Tuesday, Brazil's federal reinsurance company IRB Brasil Re said Petrobras was likely to get a renewal of its overall insurance coverage, though at a higher price than previously, as IRB already had proposals from various firms. Petrobras was forced to extend the Friday deadline for insurance quotes until Tuesday as it received no offers. The rig was insured for $500 million. Petrobras' oil output loss could translate into losses of up to $450 million this year, officials said.

Responding to accusations by trade unions and engineers that Petrobras had known about problems at the rig before the blasts and yet done nothing, Reichstul said that the rig's managers had been authorized to halt production at any time. He also said that the last reports from the doomed rig were saying that problems with gas buildup had been resolved. "Who commandeers a platform has all the freedom (to stop production). As in a Boeing, who makes the decisions is the commander. If something is wrong, the plane does not take off,' Reichstul said.

Earlier, the company acknowledged that managers at the platform had recommended stopping production at one stage to replace a faulty part up to three days before the accident. Petrobras directors then said the managers had ordered a replacement for the faulty part and were waiting delivery. The head of the national oil workers' union, Mauricio Rubem, questioned the autonomy of managers' decision when the platform represented 6 percent of national oil output.

"It's very difficult for a manager to make a decision that has an impact on the trade balance, that interests the government," Rubem said in the Senate. Reichstul replied that stoppages for safety reasons were common practice in Petrobras and works would have been halted at the P-36 rig had the encountered problems presented any risks. The former state monopoly managed to avert serious environmental damage but the deaths and the fact that it knew about problems on its prize deep water platform outraged many. However, Brazil's Mines and Energy Minister Jose Jorge Vasconcelos has already made clear that Reichstul would remain in his post. Some 92 oil workers have died in accidents in the last three years and Petrobras has caused a series of embarrassing environmental mishaps. - (Reuters)