Information
Equipo Nizkor
        Bookshop | Donate
Derechos | Equipo Nizkor       

03Jan13


Transocean to pay $1.4 billion for role in BP oil spill


Offshore rig contractor Transocean Ltd has agreed to pay $1.4 billion to settle U.S. government charges arising from BP Plc's massive oil spill in the Gulf of Mexico in 2010.

The settlement unveiled on Thursday by the U.S. Department of Justice includes $1 billion in civil penalties and $400 million in criminal penalties. The company had set aside $1.95 billion in potential losses related to the Macondo well disaster, including $1.5 billion for its anticipated DoJ settlement.

Still looming is a settlement with the plaintiffs committee that represents more than 100,000 individuals and business owners claiming economic and medical damages from the spill.

UBS analyst Angie Sedita said the ultimate cost of Macondo to Transocean could end up being more than $4 billion, including a deal with the plaintiffs that may take "years to resolve." Last year, BP reached an estimated $7.8 billion deal to settle its liability with the plaintiffs.

Transocean shares rose 6.4 percent to $49.21, while the cost of insuring Transocean debt fell sharply.

"The bottom line to me is they now can put away the big black cloud that has been hanging over them," said Phil Weiss, an oil analyst at Argus.

Barclays said the DoJ settlement was below its $2.5 billion estimate and believed the clarity would lead to a "significant valuation recalibration" for the company. It noted that among Macondo contractors, Halliburton remained the only one that had not yet settled. Halliburton shares rose 1.7 percent.

Transocean said in a statement the DoJ settlement excluded potential claims related to a separate damages assessment, but noted that a court found Transocean was not liable for damages caused by the Macondo well below the water's surface. A Transocean spokesman was not available for further comment.

Switzerland-based Transocean owned the Deepwater Horizon rig that was drilling a mile-deep well when a surge of methane gas sparked an explosion on April 20, 2010, killing 11.

The accident led to months of a U.S. deepwater drilling ban and intense scrutiny of the offshore drilling industry, which is now booming despite lingering public concerns.

Of the $400 million in criminal fines, $150 million will help protect the Gulf of Mexico environment, while another $150 million will fund spill prevention and response efforts there, the DoJ said. Transocean must also implement court-enforceable measures to improve safety and emergency response on U.S. rigs.

"From what I have read, they (Transocean) played a part, but BP is the lion's share and ought to pay $15 billion dollars." said Tony Kennon, mayor of Orange Beach, Alabama.

The U.S. Chemical Safety Board found that BP and Transocean both had "safety management system deficiencies that contributed to the Macondo incident," and neither had adequate safety rules.

The DoJ said that in agreeing to plead guilty to violating the Clean Water Act, Transocean admitted that members of its crew, acting at BP's direction, were negligent in failing fully to investigate indications that the Macondo well was not secure.

"Unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well," BP said in a statement.

Halliburton said it had substantial legal arguments against any liability, including an indemnity in its contract with BP.

BP in November agreed to a U.S. government settlement worth $4.5 billion, including the largest criminal fine ever at $1.256 billion. The London-based oil company also agreed to plead guilty to obstruction of Congress, a felony.

New York-traded shares of BP rose 1.7 percent on Thursday.

All eyes will now turn to the trial starting on February 25 in New Orleans, which will cover Clean Water Act violations that could cost BP as much as $21 billion if it is found guilty of gross negligence.

"That's where fairness will be found - or lost," said National Audubon Society CEO David Yarnold, adding that most of those fines would go toward restoring the Gulf of Mexico.

[Source: By David Ingram, Reuters, Washington, 03Jan13]

Tienda de Libros Radio Nizkor On-Line Donations

Informes sobre DESC
small logoThis document has been published on 07Jan13 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.