Judge blocks bid to stop Chevron Brazil operating

Reuters News
Posted: Apr 11, 2012 4:03 PM
Judge blocks bid to stop Chevron Brazil operating

RIO DE JANEIRO (Reuters) - A Brazilian judge denied an injunction seeking to bar U.S. oil company Chevron Corp and drill-rig operator Transocean Ltd from operating in Brazil after two offshore oil leaks, a federal court in Rio de Janeiro said on Wednesday.

The judge, Guilherme Diefenthaeler of the Second Federal Region's appellate division, ruled that granting the injunction, would interfere with the legal authority of the ANP, Brazil's oil regulator, to manage the oil industry and would represent an improper judicial intrusion into public administration, the statement said.

The ruling was made on an appeal by a federal prosecutor who had their initial request to issue the injunction banning Chevron and Transocean denied by a lower court, the statement said.

The injunction had also sought to prevent Chevron or Transocean from transporting oil in Brazil and to ban the movement of their equipment out of the country. The injunction would have imposed penalties of 500 million reais ($273 million) a day for failure to comply.

The same federal prosecutor has launched two 20 billion-real ($11 billion) civil lawsuits against the companies and has filed criminal charges against 17 Chevron and Transocean employees that carry jail terms of up to 31 years.

The suits are related to an offshore spill of approximately 3,000 barrels in the Chevron-operated Frade field northeast of Rio de Janeiro in November.

A leak in March of about two barrels led to a complete shutdown of operations in the area so that Chevron, its drilling contractor Transocean, and Chevron's partners in Frade could study geological conditions that may have contributed to the November spill.

Both Chevron and Transocean deny any wrongdoing in the leaks.

"We welcome the judge's ruling to deny the injunction sought by the prosecutor," Transocean said in a statement. "We will continue to vigorously defend our company, our people, our reputation and our quality of services."

Chevron officials were not immediately available for comment.

Chevron owns 52 percent of the Frade field, Brazil's state-led oil company Petrobras owns 30 percent, and a Japanese group led by Inpex Corp and Sojitz Corp owns 18 percent.

($1 = 1.83 Brazilian reais)

(Reporting by Jeb Blount; Editing by Gerald E. McCormick)