NEW YORK (AP) -- A Raymond James analyst said Tuesday that it's good for Chevron that Brazil authorized the oil company to resume production off the coast of Rio de Janeiro.
An oil spill of about 110,000 gallons occurred in November 2011 off the Brazilian coast. Leaks resumed several months in March and production in the Frade field was halted. The field, in which Chevron has a nearly 52 percent interest, had been producing around 62,000 barrels per day.
San Ramon, Calif.-based Chevron Corp. last year produced an average of 2.64 million barrels of oil and gas per day, down from 2.67 million per day in 2011. Production had been hurt by the closure of the Frade field.
"We bet it feels good today at Chevron regional headquarters in Rio," said Raymond James' Pavel Molchanov in a client note Tuesday. The analyst, who has an "Outperform" rating on Chevron, noted that the oil and gas producer still has legal disputes in Argentina and Ecuador.
The authorization from Brazil's National Petroleum Agency lasts for one year and will allow Chevron to resume production on six offshore wells. Chevron said in an emailed statement on Tuesday that its preparations to restart production will begin shortly.
Criminal charges against Chevron and a driller, Transocean Ltd., were dropped but both still face two civil lawsuits seeking $20 billion in damages.
Shares of Chevron gained 90 cents to $118.71 in afternoon trading.
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