Chevron and Transocean Asked to Shut Down Brazil Operations [UPDATE: Chevron Responds]

SAO PAULO (Dow Jones)–Brazil’s federal prosecutor on Wednesday said it wants Chevron Corp (CVX) and Transocean Ltd (RIG, RIGN.VX) to shut down operations in Brazil, as it sues the two firms for 20 billion Brazilian reais ($11 billion) in damage allegedly caused by an oil spill in early November.

The prosecutor’s office in Campos, Rio de Janeiro state, has brought suit against Chevron and Transocean for the alleged environmental damage, and also wants a court injunction to stop the two firms’ operations while the broader case continues, according to a statement posted on the prosecutor’s web site.

The drilling accident on Nov. 7 caused an oil spill from an appraisal well at the Frade oil field, which lies in deep Atlantic waters off the coast of Rio de Janeiro state.

The prosecutor, Eduardo Santos de Oliveira, found that Chevron and Transocean “weren’t able to control the damage caused by the spill of nearly 3,000 barrels of oil, which shows a lack of planning and environmental management by the companies,” according to the statement.

The statement said the prosecutor will hold a press conference on Thursday.

On the web: www.pgr.mpf.gov.br

-By Matthew Cowley, Dow Jones Newswires

Chevron Corporation has released the following statement with regards to media reports claiming that federal prosecutors in Brazil plan on suing the oil giant for last month’s oil spill at the Frade Field offshore Brazil and requesting a complete shut down of Chevron’s (and Transocean’s) Brazil operations. Here is the statement from Chevron:

Chevron Corporation (NYSE: CVX) said a Brazilian federal district prosecutor has told reporters that he will file a civil lawsuit against Chevron and other companies seeking a reported 20 billion reais ($10.7 billion) in damages, and an injunction stopping Chevron’s activities in Brazil. Chevron has not received any formal notice of this action. Chevron also has not received any instruction from the regulatory agencies with oversight responsibility for our activities in Brazil regarding suspension of our operations.

From the outset, Chevron responded responsibly to the incident at its Frade Field and has dealt transparently with all Brazilian authorities. The flow of oil from the source was stopped within four days and the company continues to make significant progress in containing any residual oil. Chevron has also continued to address the surface sheen, which is now less than a single barrel. There have been no coastal or wildlife impacts. Via Chevron