Exclusive: Chevron Brazil ban overturned; company offers changes

Fri Nov 30, 2012 5:10pm EST
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By Jeb Blount

RIO DE JANEIRO (Reuters) - Chevron Corp's (CVX.N: Quote) efforts to restart oil output in Brazil received a boost after a court overturned a ban on operations and the company agreed with prosecutors on a plan to improve safety and operating procedures after a November 2011 oil spill.

The ban was overturned by appeals-court judge Guilherme Dienthaeler of Brazil's Second Regional Federal Tribunal in Rio de Janeiro, court press officials told Reuters Friday. Details of the ruling are unlikely until next week, the officials said.

Prosecutors won the injunction banning Chevron, the No. 2 U.S. oil company, and its drilling contractor Transocean Ltd. in July. The injunction sought to assure payment of $20 billion in damages for alleged spill-related environmental damages, in Brazil's largest ever environmental lawsuit.

As long as the ban held, Brazil's oil regulator, the ANP, said it would be unable to consider a petition to restart oil output in Frade, the field where the spill occurred. The ban stood even though Chevron accepted a July report criticizing its drilling plan and citations and fines of more than $16 million.

In a related development, Chevron and Transocean agreed to a plan to change offshore safety and operating procedures, a spokeswoman for federal prosecutors told Reuters on Friday.

If a final agreement is reached after public consultations, the plan will be presented to the Federal judge hearing the lawsuit. That could help the companies by showing their willingness to improve Brazil's oil industry, the prosecutors' office in Rio de Janeiro said.

The agreement, known as a "change-of-conduct accord", was drafted at the companies' request with the same federal prosecutors who are handling two civil lawsuits against Chevron and Transocean, the prosecutors' office said.

The office declined to give details of the accord but said they would be presented at a public hearing on December 14 in Rio de Janeiro by federal prosecutor Gisele Porto.   Continued...