BRAZILIAN COURT GETS TOUGH ON DRILLERS
By Antonio Guerrero
Following a series of oil spills off the coast of Rio de Janeiro this year, a Brazilian court has ordered Chevron and driller Transocean to halt all drilling and transportation operations until an investigation is completed.
Brazil orders halt on drilling
Authorities had banned Chevron earlier this year from any new drilling and/or water-injection operations at working wells in Brazil. Chevron, which estimates the spills involved 110,000 gallons of leaked oil, says it handled the spill appropriately and plans to appeal the recent court ruling. In March, federal prosecutors filed criminal charges against 17 Chevron and Transocean executives in connection with the incident, followed by an $11 billion lawsuit against both companies.
The Brazilian government is investing nearly $600 million in security equipment and training ahead of the 2014 FIFA World Cup, under the event's Strategic Security Plan. Brazil's Special Secretariat for Major Events says the 2013 FIFA Confederations Cup in Brazil next June will put the security plan to the test. The country will also host the 2016 Olympic Games.
An IMF report praises Brazil's financial system for weathering the 2008 global financial crisis but warns that policymakers must monitor for signs of potential market bubbles. The lender says that Brazil's rapid credit expansion is boosting household debt and real estate prices. Falling interest rates have also prompted domestic investors to seek higher yields, which could result in underpriced risk and inflated asset prices.