The Rising Influence of Rising Affluence

[DewDiligence]

CVX/RIG—Brazil’s overzealous prosecutor from Campos has been stripped of the oil-spill case against the companies:

http://www.reuters.com/article/2012/04/18/chevron-transocean-idUSL2E8FIHJ920120418

A judge moved a criminal case against Chevron and Transocean to a court in Rio de Janeiro, a court document said on Wednesday, removing crusading prosecutor Eduardo Santos de Oliveira from the proceeding.

LOL re the characterization of Oliveira as crusading. As noted in #msg-73644515, Oliveira’s threat to convict CVX/RIG employees of criminal charges with 30+ year jail terms proved that he was grandstanding for the local populace in utter disregard of any standard of reasonableness.

The criminal case was the last of three high-profile cases by Santos de Oliveira to be moved to Rio, including two 20 billion reais ($11 billion) lawsuits against the companies.

Fines of this magnitude probably won’t stick insofar as the actual damages from the spill were de minimis.

The transfer of the criminal case comes on the heels of another decision in favor of the companies last week from yet another court, which denied a request by the prosecutor to bar the two companies from operating in Brazil… “Chevron is pleased with the court decision [to remove Oliveira],” Chevron Corp's head of media relations, Kurt Glaubitz, said in a statement.

CVX and RIG are not quite out of the woods, but their legal predicament in Brazil looks much less troublesome. I continue to presume that Brazil needs companies like CVX to invest in pre-salt development projects more than CVX needs Brazil, and hence the ultimate resolution of this case will not be onerous for CVX and RIG.