No one wins if Brazil suspends Chevron from drilling following an oil spill off the Rio de Janerio coast, MercBloc President Dan Dicker said Wednesday.
Brazilian regulators reportedly halted the company’s privileges in connection with the spill, which began Nov. 7. They also denied a Chevron request to drill deep-sea subsalt areas in the Frade region.
Chevron said it had not yet received official word of any punitive action.
“In some ways, the Brazilians are losing out if they actually ban Chevron from working through the subsalt, which might hold as much as 200 billion barrels of oil,” Dicker said on “Fast Money.”
By comparison, Saudi Arabia’s reserves hold approximately 250 billion barrels, and the Bakken shale in the United States holds some 20 billion barrels.
(Related Story: No Supply Problem for Oil, Dicker Says)
News of the suspension came a day after Brazil announced it would fine Chevron $28 million for the oil spill. Penalties in the ongoing investigation could reach $140 million.
However, Dicker cautioned against buying Chevron’s competitors on the announcement. Petroleo Brasilerio and Petrobras Argentina closed down for the day 3 percent and 5 percent, respectively.
“The kind of expertise that Chevron has the Brazilians need, so I’m not sure there’s any winner here — just losers,” he said. “This is the most difficult oil find to get out of the ground in terms of offshore.”
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Trader disclosure: On Nov. 23, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns C; Adami owns GS; Adami owns INTC; Adami owns AGU; Adami owns NUE; Adami owns MSFT; Kelly is long GOOG; Kelly is long JEF puts; Kelly is long LO; Kelly is long PM; Kelly is long treasury notes; Kelly is long SPY puts; Finerman owns AAPL; Finerman owns JPM; Finerman’s firm owns AAPL and short calls; Finerman’s firm owns GOOG; Finerman’s firm owns JPM and long leaps; Finerman’s firm owns IBM and short calls; Finerman’s firm owns WMT; Finerman’s firm owns TGT; Finerman’s firm owns M and short calls; Murphy owns AKS; Murphy owns WG; Murphy owns X; Murphy owns HAL; Murphy owns DE; Murphy owns M; Iuorio is long puts in SPY; Iuorio is short calls in SPY; Iuorio is short VXX and long calls in VXX to make a net long position
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