Bloomberg News

Transocean Had Talks to Settle U.S. Spill Case for $1.5 Billion

September 10, 2012

Transocean Ltd. (RIG:US) said it had been negotiating to pay $1.5 billion to the U.S. to settle civil and criminal claims arising from the 2010 Gulf of Mexico oil spill.

The U.S. sued Transocean in 2010, alleging violations of federal pollution law. Transocean was the owner and operator of the Deepwater Horizon oil rig, which exploded and sank in the Gulf of Mexico in April 2010, setting off the largest offshore oil spill in U.S. history.

“The parties have been unable to come to an agreement on a settlement,” Transocean said in a regulatory filing today. “There are a number of issues that the parties would need to resolve in order to reach any settlement.”

One sticking point is whether any settlement would cover costs to Transocean for natural resources damage under the Oil Pollution Act of 1990, Transocean said in the filing. This clause requires responsible parties to reimburse governments for the cost of restoring natural resources to pre-incident conditions.

The blowout and explosion on the Deepwater Horizon, which killed 11 workers, prompted hundreds of lawsuits against London- based BP Plc (BP/), owner of the Macondo well; Vernier, Switzerland- based Transocean; and Halliburton Co. (HAL:US), which provided cementing services.

BP and lawyers for private parties reached a $7.8 billion partial settlement of claims in March. The U.S. claims against BP and Transocean remain.

Trial Date

The judge presiding over the litigation set a Jan. 14 trial date to determine fault for the sinking of the Deepwater Horizon and resulting undersea leak.

Transocean has set aside $2 billion as a reserve for Macondo-related claims, the company said. Transocean had been in discussions with BP and lawyers on the plaintiffs’ steering committee about possible settlements, the company said. These discussions ended in February because the amounts proposed by BP and the plaintiffs’ lawyers were excessive, Transocean said.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • RIG
    (Transocean Ltd)
    • $18.89 USD
    • 0.12
    • 0.64%
  • HAL
    (Halliburton Co)
    • $39.73 USD
    • 0.03
    • 0.08%
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