Brazil Judge Denies Bid to Halt Chevron, Transocean Operations

RIO DE JANEIRO - A federal judge in Brazil denied Wednesday a prosecutor's request to suspend the local operations of U.S. oil major Chevron Corp. and rig operator Transocean Ltd., saying that the country's oil regulators and not federal prosecutors should issue such bans.

Brazil's National Petroleum Agency, or ANP, "has the competency and technical knowledge to evaluate the best solution available to avoid accidents of this nature, as well as the penalties to be applied," Federal Judge Guilherme Diefenthaeler said in the decision. A previous request for an injunction to keep Chevron and Transocean from operating in Brazil was denied in February.

A federal prosecutor had asked Brazil's courts to suspend the local operations of Chevron and Transocean after a November drilling accident at the Chevron-operated Frade field caused an estimated 2,400 to 3,000 barrels of crude oil to seep into the sea from cracks in the seabed. The injunction was part of a 20 billion Brazilian reais ($11.8 billion) civil suit filed against the two companies in December.

A second BRL20 billion civil lawsuit was filed against the companies for a March leak, while criminal charges were also leveled against the two companies and 17 employees. The companies also face hefty fines from the ANP and local environmental regulators for the spill.

Chevron shut down operations at the Frade field last month to better study the geology of the area.

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

Chevron officials weren't immediately available to comment.


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