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Chevron faces $10.6bn lawsuit

Brazilian federal prosecutors are seeking $10.6bn (£6.8bn) in damages from US-based Chevron Corp because of environmental harm caused by an offshore oil leak.

They are also asking a judge to order Chevron and Transocean, the drilling contractor for the well where the leak occurred in November, to halt all activities in Brazilian territory for an indefinite period.

"During an investigation, the attorney general's office found that Chevron and Transocean were not capable of controlling the damage caused by the spill of nearly 3,000 barrels of oil, proof of a lack of environmental planning and management by the companies," the prosecutors said yesterday.

Chevron said it had received no notice of the action and that the Brazilian oil regulators had not contacted it about the issue. "From the outset, Chevron responded responsibly to the incident at its Frade Field and has dealt transparently with all Brazilian authorities," the company added.

Transocean also said it had not received any official notice of the move by the prosecutors, adding that its rigs continued to operate in Brazilian waters.