Rio de Janeiro, 27 September (Argus) — Chevron and drilling contractor Transocean have been officially served with a preliminary injunction requiring the companies to cease operations in Brazil within 30 days.
Both companies are appealing the injunction, but say they will comply with the ban if required.
The injunction stems from a small oil spill in November 2011 at the Chevron-operated Frade field offshore in the deepwaters of the Campos basin.
In July, a federal court in Rio de Janeiro granted the injunction against the two companies, requiring both to cease operations 30 days from the date of service or face a stiff 500mn real ($250mn) daily fine for non-compliance. Both companies still face civil and criminal charges, including damages of $20bn, stemming from the incident.
“The company is vigorously pursuing the overturn or suspension of the preliminary injunction, including through an appeal to the Superior Court of Justice,” Transocean said.
The company has 10 rigs under contract in Brazil, including eight working for Brazilian state-controlled oil company Petrobras.
“For the six months ended June 30, 2012, the company's operations in Brazil accounted for approximately 11pc of consolidated operating revenues,” Transocean said.
Both Brazilian oil regulator ANP and Petrobras are supporting Transocean in the fight against the injunction. ANP has filed, and lost, an appeal against the injunction.
Petrobras has been vocal in its concern of what a ban on Transocean would mean for its own operations as well as the Brazilian oil industry.
“We don't even want to think about what would happen if the ban took effect,” Petrobras' chief executive Maria das Gracas Foster said last week. “The impact would be very bad.”
Chevron has less to lose from the injunction, the company voluntarily suspended operations at Frade – the company's only producing field in Brazil – following a second minor spill in March 2012. The company maintains the case is without merit, vowing to fight all charges related to the incident.
“We will seek all legal means at our disposal to overturn the injunction and demonstrate the company acted diligently and appropriately at all times,” Chevron said.
The company was fined 35mn reals ($17.5mn) by ANP earlier this month after being faulted for 25 offenses the agency claimed lead to the November oil spill.
“Chevron Brasil will implement a number of process improvements developed from lessons learned in the Frade incident,” the company said.
Chevron has paid the ANP fine and the agency is now reviewing the company's proposal to restart its Frade operations.
Prior to the suspension of output, Frade was producing an average 60,000 b/d.
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