Bloomberg News

Petrobras Seeks to Override Transocean Brazil Suspension

September 28, 2012

Petroleo Brasileiro SA (PBR:US), the world’s biggest oil producer in deep waters, asked Brazilian courts and regulators to override a ruling that would halt rig owner Transocean Ltd. (RIG:US)’s operations in the country.

Petrobras filed a “writ of mandamus” to Brazil’s courts and the National Petroleum Agency, or ANP, petitioning to keep Transocean’s rigs operating, the Rio de Janeiro-based company said in a statement today.

“This decision affects Petrobras’s activities since it leads to the shutdown of seven rigs currently in operation that were chartered by Transocean to Petrobras, in addition to not allowing the operation of an additional chartered rig that is docked,” Petrobras said.

A Brazilian court yesterday ordered Transocean, the world’s largest offshore oil driller, to cease operations in the country within 30 days as part of a criminal investigation into an oil spill last year at Chevron Corp. (CVX:US)’s Frade field. The rigs are crucial for meeting Petrobras’s production targets, Maria das Gracas Foster, chief executive officer of the Brazilian producer, said Sept. 20.

‘Unprecedented Support’

Under Brazilian law, the regulator doesn’t have the authority to reverse yesterday’s ruling. The regulator is working to guarantee that Transocean will keep operating in Brazil, said an ANP official, who declined to be named because of agency policy.

Support from Transocean’s customers is “unprecedented,” Guy Cantwell, a company spokesman, said in an e-mail.

Petrobras said it’s also analyzing contracting new rigs in the international market and relocating other rigs to mitigate the effects if Transocean has to cease operating.

Transocean, which posted its biggest weekly decline this year, fell 1.1 percent to close at $44.89 in New York. Petrobras dropped 1.5 percent to 22.37 reais in Sao Paulo.

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

  • PBR
    (Petroleo Brasileiro SA)
    • $16.78 USD
    • -0.31
    • -1.85%
  • RIG
    (Transocean Ltd)
    • $34.08 USD
    • -1.07
    • -3.14%
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