The ban stems from an oil spill last November in an offshore field operated by Chevron Corp (>> Chevron Corporation) at a well drilled with a Transocean rig. The eight other Transocean rigs in Brazil work for Petrobras (>> Petroleo Brasileiro Petrobras SA), including seven contracted to the state-led oil company and another subcontracted from BP (>> BP plc).

If not overturned, the ban could seriously disrupt exploration and drilling in one of the world's most promising offshore oil frontiers by removing about 13 percent of Brazil's drilling fleet.

Petrobras Chairwoman Maria das Gracas Foster has said that a lack of drilling rigs, even with Transocean's rigs operating, is one of the reasons production growth at her company has stalled despite a $237 billion, five-year expansion plan, the world's largest corporate spending program.

The Transocean ban is related to civil lawsuits seeking about $20 billion in damages from Transocean and Chevron for the spill in the Frade field, which leaked 3,600 barrels of oil into the sea northeast of Rio de Janeiro.

Transocean said it was "vigorously pursuing" a reversal of the injunction, including an appeal to the Superior Court of Justice. "Absent relief from the courts, Transocean will be required to comply with the preliminary injunction," it added.

The world's largest offshore rig contractor warned two weeks ago, after the ban was upheld on appeal, that it could not be sure of overturning the decision in time to prevent its rigs going to zero revenue for some period of time.

Shares of Transocean, which earns 11 percent of its revenue in Brazil, declined by about 1 percent after the ruling, ending 1.7 percent lower at $45.37, on concerns that the average fourth-quarter earnings estimate of 90 cents per share might be at risk.

"The Brazilian issue will continue to overhang the stock until resolved," said UBS analyst Angie Sedita, estimating a drop in earnings of 5 cents per share for every week of Brazil downtime. "Rig has strong local support, but we believe the injunction is politically driven versus operationally driven."

Petrobras is working to help overturn the ruling, which would halt the exploration and development of some of its most promising deepwater fields.

Petrobras has a total of 31 offshore rigs, either self-owned or under contract, and it has struck a deal to build 28 more rigs in Brazilian shipyards by 2020.

The ANP, Brazil's oil regulator, has said there was no negligence in last November's Frade spill and that only Chevron had to pay fines and present a remedial plan before getting approval to drill again.

Chevron, the second-largest U.S. oil company, paid the ANP-levied fine on Thursday, and received a 30 percent discount on the 35.1 million-real ($17.3 million) charge because it paid promptly and did not challenge the 24 violations ANP found.

But prosecutors have won the injunction against Chevron and Transocean that will stand until the civil suit is resolved, which could take years. Chevron and Transocean say they have done nothing wrong.

When exactly that injunction takes effect is under dispute. The July 31 ruling by a Federal Court in Rio de Janeiro was supposed to go into effect 30 days after the judges' decision was published in a local legal gazette and the ruling physically served to company executives.

Separately on Thursday, Transocean announced the appointment of John Stobart as chief operating officer, effective Monday. Stobart had been worldwide drilling manager for BHP Billiton Petroleum (>> BHP Billiton Limited) since 1994 in Australia, the UK and Texas.

"I expect that he will be instrumental in taking the company to an even higher level of performance," said Steven Newman, Transocean's previous COO before he was promoted to chief executive more than two years ago.

The new COO comes just a few weeks after Transocean named a new chief financial officer after an eight-month search. Esa Ikäheimonen, the former CFO of rival Seadrill (>> SeaDrill Ltd) who spent two decades working for Royal Dutch Shell Plc , will succeed interim CFO Greg Cauthen on November 15.

(Reporting by Braden Reddall in San Francisco and Jeb Blount in Rio de Janeiro; Editing by Leslie Gevirtz and Jean Yoon)

By Braden Reddall