Brazil Court Upholds Ban on Chevron, Transocean Operations

RIO DE JANEIRO - A Brazilian court upheld an injunction that bans U.S. oil company Chevron Corp. and drilling company Transocean Ltd. from operating in Brazil, according to a decision posted on the court's website Tuesday.

Chevron and Transocean had appealed the ban earlier this month.

In a unanimous decision, a panel of three judges upheld the injunction barring the two companies from operating in Brazil because of their role in a November oil spill at the Chevron-operated Frade offshore oil field. The two companies face civil and criminal lawsuits for the roles in a November accident at the Chevron-operated Frade offshore oil field, which caused 3,700 barrels of crude to seep from cracks in the seabed. Both companies have denied any wrongdoing.

"We're very disappointed with the court's ruling and disagree with it," said Transocean spokesman Guy Cantwell. "The case is without merit." Mr. Cantwell said Transocean rigs continue to operate in Brazil.

Chevron didn't immediately respond to requests for comment.

In July, Brazil's National Petroleum Agency, or ANP, cited Chevron for 25 infractions related to the incident and said that the company would be fined close to the 50 million reais ($24.5 million) allowed by law. The total fine is expected to be determined later this month.

Transocean, meanwhile, was absolved of any wrongdoing in the accident.

Despite the incident, ANP officials said they would meet with Chevron to discuss restarting output at Frade, which was shuttered voluntarily by the company in March after new oil seeps were discovered.


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