Brazil judge blocks Chevron, Transocean injunction

Tue Feb 28, 2012 9:30pm EST
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By Jeb Blount and Sabrina Lorenzi

RIO DE JANEIRO (Reuters) - A federal judge in Brazil declined to grant an injunction suspending the Brazilian operations of oil major Chevron and offshore oil-rig contractor Transocean over a November oil spill northeast of Rio de Janeiro, providing temporary relief to the two companies.

The injunction was requested by Brazilian federal prosecutor Eduardo Santos de Oliveira as part of his 20 billion real ($11.8 billion) civil lawsuit against Chevron, the field's majority-owner and operator, and Transocean, its drilling contractor.

The rejection of the injunction does not limit or block the civil lawsuit or a criminal case against Chevron Corp (CVX.N: Quote), the No. 2 U.S. oil company, and Transocean Ltd RIGN.VX, the world's No. 1 offshore drilling contractor, over the oil spill, court documents released on Tuesday showed.

San Ramon, California-based Chevron, which operates the largest foreign-led oil field in Brazil, has already been fined more than $50 million for the spill. Switzerland-based Transocean has 10 rigs working in Brazil for companies such as Brazil's Petrobras (PETR4.SA: Quote), Chevron and India's ONGC (ONGC.NS: Quote).

The injunction was denied because prosecutors did not show that suspending Chevron and Transocean operations in Brazil would help get the companies to pay for alleged environmental damage, Raffaele Felice Pirro, a federal judge with a court in Rio de Janeiro, said in his decision.

The injunction could be seen as an attempt to punish the companies without a trial, and to do that without giving them a chance to defend themselves, Pirro wrote.

"We do not discuss the seriousness of the oil spill nor the probable catastrophic consequences that come from the accident," the judge wrote.

"The supposed responsibility of the defendants will be shown in the proceedings under the guidance of a magistrate, by means of investigation and with the possibility of all parties to manifest their participation in this sad incident."   Continued...

A Chevron gas pump is shown at a Chevron gas station in Encinitas, California April 28, 2011. REUTERS/Mike Blake