SAO PAULO (Reuters) - A Brazilian court overturned an injunction to suspend off-shore drilling by rig operator Transocean (RIG.N), accepting that it could have caused billions of dollars in lost revenue for the government and the state-led oil firm Petrobras (PETR4.SA).
Judge Felix Fischer, president of Brazil’s second-highest court — the STJ, said in a court document seen by Reuters that he would accept part of an appeal filed by the oil regulator ANP on behalf of Petrobras earlier this month to lift the injunction.
If it had remained, the injunction would have shutdown Transocean’s 10 drilling rigs operating in Brazilian waters, eight of them under contract by Petrobras, by October 27. The court said there are 72 rigs operating in Brazil.
Fischer accepted ANP’s argument that losses in revenue to Petrobras and the government in royalties would amount to more than 6.7 billion reais ($3.8 billion) over two years if Transocean’s rigs were suspended from operating.
The court document seen by Reuters is likely to be published early this week but was signed by Fischer on Friday.
Brazil is in the early stages of developing its massive subsalt off-shore oil band, which could hold upward of 100 billion barrels of oil. The oil is technically tricky to lift.
A shortage of drilling rigs able to operate in waters more than 2,000 meters deep has restrained Petrobras’ push to bring on this new subsalt oil despite a $237 billion five-year expansion plan.
The Transocean ban is related to a lawsuit seeking nearly $20 billion from the rig operator and Chevron Corp. (CVX.N) for a November oil spill in the Frade offshore field northeast of Rio de Janeiro.
Chevron had contracted Transocean’s Sedco 706 rig to drill in Frade, where the ban on Transocean remains in force. Chevron and Transocean say they were not negligent in the spill and are fighting the lawsuits and related criminal charges.
Brazil’s oil regulator ANP said in a July report that Transocean had no responsibility for the spill.
Petrobras, Transocean and Chevron could not immediately be reached late on Sunday to comment on the court’s decision to lift the injunction.
Reporting by Reese Ewing; Editing by Ed Davies