Bloomberg News

Transocean Considers Halt Order, Keeps Working in Brazil

August 01, 2012

Transocean Ltd. (RIG:US), the world’s largest offshore drilling company, continues operating in Brazil and is evaluating a court order issued yesterday to suspend operations within 30 days while two oil spills are investigated.

The case against Transocean is “without merit,” Guy Cantwell, a spokesman, said in a telephone interview. The suspension was in response to spills at Chevron Corp. (CVX:US)’s Frade offshore oil project in November and March. Transocean supplied the rig where Chevron had a drilling accident last year at Frade.

“We reiterate that Transocean crews acted responsibly and quickly, following the highest industry standards,” Cantwell said. “We have a very strong case and we will use every legal means necessary to prove it.”

Transocean, based in Vernier, Switzerland, has nine rigs operating in Brazil, according to the company’s website. Seven of the rigs are contracted by state-controlled Petroleo Brasileiro SA (PETR4), according to Rigzone, a website that tracks global drilling activity.

Magda Chambriard, the head of Brazil’s oil regulator ANP, said July 19 that Transocean had no role in the Frade spills and that the agency was in talks with Chevron to resume output. The Brazilian court said the suspension of operations will last until the federal prosecutor’s office, the oil regulator and environmental agencies complete investigations into the spills.

“If something so preposterous were to take hold it would be a reason to question how the system works,” Cleveland Jones, an oil specialist and geology professor at Rio de Janeiro State University, said in a telephone interview. Jones expects Transocean and Chevron to appeal the decision.

Chevron shut production at Frade in March and doesn’t produce oil anywhere else in Brazil.

Transocean’s shares rose 0.1 percent to $46.89 at 10:38 in New York.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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Companies Mentioned

  • RIG
    (Transocean Ltd)
    • $25.93 USD
    • 0.41
    • 1.58%
  • CVX
    (Chevron Corp)
    • $118.58 USD
    • 1.27
    • 1.07%
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