Brazil lawsuit against Chevron may scare investors

AP News
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Posted: Dec 16, 2011 11:29 AM
Brazil lawsuit against Chevron may scare investors

A business analyst says the nearly $11 billion lawsuit filed by Brazilian prosecutors against San Ramon, Calif.-based Chevron Corp. because of an offshore oil leak could scare away foreign capital needed to develop Brazil's huge offshore oil deposits.

Robert Kessler is head of Pickering, Holt & Co.'s global integrated oil research department. He says the $10.6 billion fine federal prosecutors are seeking is more than 700 percent of Chevron's $1.5 billion net capital investment in Brazil.

He says Friday that such a fine "would be a poor risk-reward ratio for all companies looking to invest in the business."

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The leak that occurred in November spilled nearly 3,000 barrels of oil into the Atlantic Ocean.