Business | Oil & Gas

BP contract shields Transocean in spill

US judge rules rig owner spared from paying damage claims, but not exempt from punitive damages, civil penalties

  • AP
  • Published: 00:00 January 28, 2012
  • Gulf News

  • Image Credit: Bloomberg
  • The controlled burning of oil on the surface of the water near the site of the BP Deepwater Horizon oil spill in the Gulf of Mexico. BP, Transocean and Halliburton have been sparring over who is at fault for causing the blowout.

New Orleans:  The rig owner involved in drilling the ill-fated well that blew out in the Gulf of Mexico and spewed more than 757 million litres of oil will not have to pay many pollution claims because it was shielded in a contract with well-owner BP, a federal judge ruled on Thursday.

The ruling comes as BP, the US southern states affected by the disaster and the federal government are discussing a settlement over America's largest offshore oil spill.

BP, Transocean and Halliburton have been sparring over who was at fault for causing the blowout.

The out-of-control well was capped in July 2010. Federal investigators have said that BP bears ultimate responsibility for the spill, but has faulted all three companies to some degree.

Clear-cut winner

Thurday's decision may have spared Transocean from having to pay potentially billions of dollars in damage claims. However, US District Judge Carl Barbier said the driller still is not exempt from paying punitive damages and civil penalties that arise from the April 20, 2010, blowout 160km off the Louisiana coast. Those penalties could amount to billions of dollars. Law experts were split over who is a clear-cut winner.

BP has been pursuing agreements with multiple parties to reach settlements that would make an upcoming trial involving hundreds of spill lawsuits in New Orleans unnecessary, or at least resolve as many of the issues as possible.

The Justice Department also is involved, working with the states to create an outline for a settlement that would resolve their potentially multibillion dollar claims against BP and the other companies involved in the disaster, Alabama Attorney General Luther Strange told The Associated Press.

Justice led a meeting last week in Washington among the US states in an effort to formulate an agreement that would satisfy government and state claims, including penalties and fines, Strange said. He also indicated if there is a settlement that officials are discussing what to do with the $20 billion (Dh73 billion) fund set up by BP to pay victims.

The lead attorneys for individuals and businesses suing BP were not at the meeting.

According to Strange, a federal magistrate judge has been asked to expedite settlement discussions. The Louisiana attorney general's office said in a statement to the AP that it is in settlement discussions with BP, which would not comment on any deals in the works.

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