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Saturday, October 22, 2016

Writ Issued Protesting Transocean Shutdown Order

October 1, 2012

Petrobras files writ of mandamus against an injunction suspending Transocean's activities in waters offshore Brazil.

(Mandamus is an extraordinary writ commanding an official to perform a ministerial act that the law recognizes as an absolute duty and not a matter for the official's discretion. (Source: Advanced English Dictionary).

Petrobras filed a writ of mandamus, in the capacity of injured third party, to suspend the injunction granted on July 31, 2012 that ordered the shutdown of the activities of Transocean Brasil Ltda (Transocean).

The injunction stems from the Public-Interest Civil Action filed by the Federal Prosecution Office in the Federal Courts of the state of Rio de Janeiro against Chevron Brasil Upstream Frade Ltda (Chevron), Chevron Latin America Marketing LLC and Transocean, on account of the Frade field incident that occurred on November 7, 2011. The injunction was granted on July 31, 2012 and ordered the suspension of Transocean's activities in Brazil within 30 days of the notice.

This decision affects Petrobras' 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 submitted a document to Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) detailing the impacts of the decision on its exploration and production activities. On September 17, 2012, the ANP filed a judicial remedy against the decision, which was being monitored by Petrobras. However, on September 27, 2012, Transocean was given notice and the 30-day countdown period came into effect for the shutdown.

This notice forces Transocean and Petrobras to take immediate action to comply with the court order to shutdown operations of the rigs currently chartered to Petrobras. Petrobras filed the writ of mandamus seeking the immediate suspension of the injunction in light of the consequences to its activities.

At the same time, Petrobras is analyzing alternative measures to counteract the effects of the injunction on its exploration and production activities, such as contracting new rigs in the international market and the relocation of other rigs that are in operation.

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