"Brazil is temporarily banning the American company, Chevron, from drilling for oil in its territory.
The National Petroleum Agency (ANP) said it would suspend Chevron's activities in Brazil until it had established the cause of an oil spill off the coast of Rio de Janeiro.
Chevron has apologised for the leak, but has stressed it acted as rapidly and safely as possible to contain it.
The Brazilian government has fined Chevron $28m (£18m) for the spill.
Brazilian Environment Minister Izabella Teixeira said Chevron could face further fines if an investigation into the spill revealed more infractions.
ANP also rejected a Chevron request to drill a deeper well in the Frade field in order to reach sub-salt fields, which could hold reserves of more than 100bn barrels of high-quality recoverable oil.
It said such drilling would "pose risks to the environment similar to those that occurred in the well where the spill occurred, but bigger and magnified by the greater depth"."
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