UPDATE 2-Brazil prosecutor stripped of Chevron court case

Wed Apr 18, 2012 6:40pm EDT

* Criminal and two civil cases taken from prosecutor

* Charges unchanged but cases now with new prosecutors

* Companies pleased with shift of cases to Rio

By Reese Ewing

SAO PAULO, April 18 (Reuters) - The Brazilian federal prosecutor pressing criminal and civil litigation against Chevron Corp and drilling-rig operator Transocean Ltd for an offshore drilling accident has lost control of the cases.

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.

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.

The momentum has shifted in the legal battle that began with a rupture and 3,000-barrel oil spill in November at a well Transocean was drilling in Chevron's Frade field off the coast of Rio. Another court took the two civil cases from Santos de Oliveira in recent weeks.

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.

Today's decision, by Judge Elder Fernandes Luciano, affects 17 employees of the companies, including Chevron Brasil's chief executive, George Buck. The employees face prison terms of up to 31 years if the case proceeds.

Luciano said the accident occurred outside national territory involving a drilling rig under Liberian flag and therefore falls under the jurisdiction of the state capital of Rio.

The transfer of the cases does not change the content of the charges, but it removes them from Oliveira's turf and hands them to another team of federal prosecutors.

"Chevron is pleased with the court decision," Chevron Corp's head of media relations, Kurt Glaubitz, said in a statement.

Santos de Oliveira has said he would appeal the transfer of the cases from his jurisdiction.

Chevron owns 52 percent of the Frade field. Brazil's state-led oil company, Petrobras, owns 30 percent and a Japanese group led by Inpex Corp and Sojitz Corp owns 18 percent.

"We respect the court's decision," Guy Cantwell, the director of communications for Transocean said by email. "Once all of the facts are fully examined, they will demonstrate that Transocean acted responsibly, appropriately and quickly last November, putting safety first."

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