Chevron Charged $2M for Negligence

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San Ramon, California based, Chevron Corp. (CVX) has agreed to pay $2 million as fine and compensation for the Aug 2012 fire in its refinery at the San Francisco Bay Area in Richmond. Of the total, $1.28 million will be paid as fine and $575,000 as reimbursements to the different state organizations involved in the case.

The company also plans to develop its air monitoring system and spend additional $145,000 towards training activities in the field of renewable energy and construction.

On Aug 6, 2012, a fire in the oil giant’s refinery in Richmond caused inconvenience to its employees as well as the locals. The explosion was tracked down to a gas leak in the pipeline due to corrosion. Chevron was found guilty of not replacing the almost 40-year old pipeline and turning a deaf ear to warnings even from its own inspectors.

While the employees suffered only minor injuries, the resultant black smoke cover caused respiratory troubles for the locals. The 245,000 barrel per day (bpd) refinery was then shutdown for nine months for repair work, hindering the company’s gasoline production significantly.

Early this year, Chevron reported that it had already paid almost $10 million as compensation, most of which went to hospitals for the treatment of those affected by the incident.

Pleading no-contest to the charges, Chevron – which is slated to spend three and a half years on probation – stated that it would look into safety enhancement on hopes that such an accident will not happen again. True to its words, Chevron is continuing with the inspection of 16,000 individual piping components.

Chevron Corp. – a leading international publicly traded oil and gas company – currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider Pioneer Southwest Energy Partners L.P. (PSE), Niska Gas Storage Partners LLC (NKA) and Ferrellgas Partners L.P. (FGP) as good buying options. These stocks are expected to perform well in the short run and currently sport a Zacks Rank #1 (Strong Buy).
 

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