Transocean CEO: Brazil Injunction is Unwarranted and Flawed

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HOUSTON–A Brazilian appeals court has denied a request by the national oil regulator to suspend an injunction barring Transocean Ltd. (RIG) and Chevron Corp. (CVX) from operating in the country, Transocean Chief Executive Steven Newman said on a conference call Wednesday.

The court responsible for the case could not yet confirm the ruling.

A Brazilian court banned the two companies from operating in the country in late July because of their roles in an offshore oil spill last year.

“This is very disappointing, as we believe the injunction order is unwarranted and is flawed legally and procedurally,” Mr. Newman said. “Let me assure you that the technical merits of our case are strong, and we are pursuing the many avenues available to us to appeal the preliminary injunction.”

Brazil’s National Petroleum Agency, ANP, sanctioned Chevron and said it would fine the company for any wrongdoing relating to the spill. The ANP cleared Transocean.

The agency requested that the court suspend the injunction.

Despite the incident, ANP officials have said they would meet with Chevron to discuss restarting output at the Frade field, which the company voluntarily shuttered in March.

A spokesman for Chevron did not respond immediately to a request for comment.

Mr. Newman said Wednesday the court has not yet served the company with the injunction and Transocean’s rigs are still under contract–the company has 10 rigs in Brazil.

Under the terms of the injunction, Transocean would have to cease activity within 30 days from the date of services.

-By Alison Sider. (c) 2012 Dow Jones & Company, Inc.