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Transocean: Prosecutor Appeals Brazil Court Move to Drop Oil-Spill Charges

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A prosecutor has appealed a Brazilian judge's decision last month to drop criminal charges against Transocean Ltd., Transocean Chief Executive Steven Newman said Monday during a conference call.

Charges had been brought against Transocean, Chevron Corp. and 17 individuals related to a 2011 oil spill at the Frade field, a deep-water development off Brazil's southeast coast.

The prosecutor, Eduardo Santos de Oliveira, had accused the companies, 16 of their employees and a subcontractor of environmental crimes and damaging public property relating to an accident on Nov. 7, 2011, in which an estimated 3,700 barrels of oil leaked from a well at the Frade field, which is operated by Chevron. It had hired Transocean to do the drilling.

Last month, a judge in Brazil dropped the criminal charges.

"We learned the prosecutor has filed an appeal but we remain confident in our position and will vigorously pursue final and comprehensive resolution of the underlying litigation," Mr. Newman said Monday.

Mr. Newman also told analysts and investors during the conference call that Transocean is in "advanced discussions" with an unnamed major integrated oil company to build a new ultra-deep-water drilling rig. The vessel's features would be "consistent" with those of four drill ships on which the company is currently working for Royal Dutch Shell PLC, Mr. Newman said.

Also during the conference call, Transocean Chief Financial Officer Esa Ikaheimonen said the company is "quite seriously" looking into dropping some of its rigs into a master limited partnership as a way to raise cash.

"It's interesting. We're quite seriously looking into it, but with a cool analytical approach rather than a mad rush," Mr. Ikaheimonen said.

Last year, SeaDrill Ltd. spun off drilling-rig assets to create a master limited partnership, Seadrill Partners LLC.

Copyright (c) 2012 Dow Jones & Company, Inc.


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