Reuters: Regulatory News: UPDATE 1-Transocean served with Brazil drilling injunction

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UPDATE 1-Transocean served with Brazil drilling injunction Sep 27th 2012, 18:57 Thu Sep 27, 2012 2:57pm EDT By Braden Reddall Sept 27 (Reuters) - Transocean Ltd said on Thursday it was served with a preliminary injunction by a federal court in Brazil that will require the company's nine rigs operating in waters off the country to cease operations in 30 days. The ban stems from an oil spill last November in an offshore field operated by Chevron Corp. Eight Transocean rigs in Brazil work for Petrobras, including seven contracted to the state-led oil company and another subcontracted from BP Plc. The ban is related to civil lawsuits seeking about $20 billion in damages from Transocean and Chevron for the spill in the Frade field, which leaked 3,600 barrels of oil into the sea northeast of Rio de Janeiro. Transocean said it was "vigorously pursuing" a reversal of the injunction, including an appeal to the Superior Court of Justice. "Absent relief from the courts, Transocean will be required to comply with the preliminary injunction," it added. The world's largest offshore rig contractor warned two weeks ago, after the ban was upheld on appeal, that it could not be sure of overturning the decision in time to prevent its rigs going to zero revenue for some period of time. Shares of Transocean, which earns about 11 percent of its revenue in Brazil, declined by about 1 percent on news of the ruling, and were down 1.6 percent at $45.40 in afternoon trading on the New York Stock Exchange. Petrobras is working to help overturn the ruling, which would halt the exploration and development of some of its most promising deepwater fields. Petrobras has a total of 31 offshore rigs, either self-owned or under contract, and it has struck a deal to build 28 more rigs in Brazilian shipyards by 2020. The ANP, Brazil's oil regulator, said there was no negligence in last November's Frade spill and that only Chevron had to pay fines and present a remedial plan before getting approval to drill again. But prosecutors won the injunction banning both Chevron and Transocean from operating in Brazil until the civil suit is resolved, which could take years. Chevron and Transocean say they have done nothing wrong. When the injunction takes effect is under dispute. The July 31 ruling by a Federal Court in Rio de Janeiro was supposed to go into effect 30 days after the judges' decision was published in a local legal gazette and the ruling physically served to company executives. Link this Share this Digg this Email Reprints

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