Chevron To Be Sued in Brazil For 2011 Oil Spill
A prosecutor in Campos, Brazil (NYSE:EWZ) will file a suit in a federal court in Brazil against Chevron (NYSE:CVX) for its role in an oil spill in November, 2011. The pending lawsuit is expected to include both a $11 billion civil lawsuit and criminal charges of both Chevron executives and employees of Transocean, Inc. (NYSE:RIG), which operated the rig involved in the spill.
Many observers believe that the punitive charges are designed in part to force companies to settle lawsuits more quickly. Brazil recently overhauled its regulatory regime for oil exploration, which puts more control of these resources in the hands of the government. These regulatory changes have also delayed new projects and pipeline licenses. In addition, the government has stopped granting oil rights in the most lucrative and newest discoveries.
Chevron also faces an $18 billion lawsuit in Ecuador. This suit stems from the actions of Texaco within Ecuador between 1964 and 1992. Texaco was bought by Chevron in 2001.
Chevron’s spill in 2011 was 1,000 times smaller than BP’s (NYSE:BP) spill in the Gulf of Mexico in 2010. No criminal charges have been filed for BP’s spill.
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