(Reuters) - Chevron Corp (CVX.N) will stay the course in Brazil even as that country said it has filed a massive $11 billion lawsuit related to an offshore oil spill, a top company executive said on Thursday.
“We are committed to Brazil,” Ali Moshiri, president of Chevron’s Latin American exploration and production unit, told reporters at a conference in Houston. “We continue to work with the federal government of Brazil, with all the agencies.”
The release of 2,400 barrels of oil from the Frade Field was an “unfortunate incident” and the company is doing what it can to solve the problem and move ahead, Moshiri said.
Brazilian prosecutors sued Chevron and rig operator Transocean Ltd RIGN.VX on Wednesday over their alleged roles in the November oil spill. The lawsuit seeks to suspend the companies from operating in that country.
Phil Weiss, oil analyst at Argus Research in New York, found the figure to be “really excessive,” adding that no other oil company would ever drill off of Brazil if this was the potential penalty.
“I have a hard time seeing how it’s going to stick,” Weiss said on Wednesday. “Unless this is Brazil’s way of saying they want Petrobras to do everything themselves offshore.”
Petrobras (PETR4.SA), Brazil’s national oil company, accounts for more than 90 percent of the country’s output.
Chevron’s Moshiri said it was important to note that the oil company stopped the source of the leak in four days and it has provided all of its resources to make sure there is no environmental impact.
Brazil has vast offshore reserves of crude oil and large western oil companies like Chevron are eager for access to those resources to grow their own output.
San Ramon, California-based Chevron has already assumed responsibility for leaking oil into water off the coast of Rio de Janeiro. It has been fined $28 million by environmental authorities for the spill.
A spokesman for Chevron said the company has yet to receive formal notice of the lawsuit.
Shares of Chevron fell 1 percent to $99.63 in late New York Stock Exchange trading.
Additional reporting by Braden Reddall; editing by Gerald E.McCormick, Bernard Orr