Transocean (NYSE: RIG) announced today that on Sept. 28, a Brazilian judge partially suspended an order for the rig operator to cease its operations in the country. The terms of the injunction had previously stated that the company had to stop all activities in Brazil within 30 days. Now, Transocean is permitted to continue to conduct business as usual, with the sole exception of any rigs in the Campo de Frade field, where there was a minor spill in November 2011.
Investors were relieved by the ruling, which came just a day after the original injunction was announced. Although the company has only 10 rigs in Brazil, the operations there accounted for 11% of total operating revenues throughout the first half of 2012. Shares surged more than 4% in morning trading today.
The Brazilian government had its own reasons to overturn the ban. The government-run Petroleo Brasileiro (NYSE: PBR) currently uses Transocean rigs in eight separate fields, and if the ban were to go into effect, the government and its oil company would lose an estimated $3.8 billion in revenues in just two years.