Both Halliburton and Transocean have reached settlement agreements with BP over the 2010 Deepwater Horizon incident in the Gulf of Mexico.
The Deepwater Horizon incident occured on 20 April 2010, spilling millions of barrels of oil into the Gulf of Mexico at alarming rates for three consecutive months that claimed 11 lives. It’s known as the largest and worst oil spill to occur in US history.
"We are pleased to have resolved with Halliburton and Transocean the final remaining disputes stemming from the Deepwater Horizon accident. We have now settled all matters relating to the accident with both our partners in the well and our contractors," Geoff Morrell, BP spokesperson said in a statement.
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Deepwater Horizon spill. Image from USCG. |
Halliburton’s agreement with BP was to resolve remaining issues, which include indemnities between the parties and dismissal of all claims against each other.
“We are pleased to have reached an amicable resolution with BP, our valued customer, that allows us to close another chapter in the Deepwater Horizon case for Halliburton,” said Dave Lesar, chairman and CEO of Halliburton. “This agreement allows Halliburton to strengthen its relationship with BP by negotiating a global master services agreement between the companies.”
BP was the operator of the Macondo well. Transocean owned and operated the Deepwater Horizon rig that caught fire after an explosion and fully submersed after burning for more than a day.
Transocean reached two separate agreements. One with BP and the other with the Plaintiffs' Steering Committee (PSC).
The settlements together resolve substantially all outstanding claims against Transocean arising from Deepwater Horizon.
According to Transocean, terms of the agreement with BP, BP agreed to indemnify Transocean for compensatory damages, including natural resource damages, while Transocean will indemnify BP for personal and bodily injury claims of Transocean employees and claims relating to any future cleanup or removal of diesel or other pollutants stored on the Deepwater Horizon. BP and Transocean will mutually release all claims each has against the other. BP will also discontinue its attempts to recover as an "additional insured" under Transocean's liability policies that will accelerate the company's recovery of approximately US$538 million in insurance proceeds. BP will also pay Transocean $125 million in compensation for legal fees it incurred.
Under the terms of the agreement with the PSC, Transocean will pay two classes of plaintiffs a total of approximately US$212 million in addition to attorneys' fees.
The first-class covered under the PSC agreement comprises private plaintiffs and local governments that potentially could assert punitive damages claims against Transocean under maritime law. The second class comprises the private plaintiffs who previously settled economic damages claims with BP and were assigned certain claims BP had made against Transocean. A court-appointed special master will allocate Transocean's payment between the punitive damages class and the economic damages class. Transocean intends to satisfy its payment obligations using cash on hand, the company said. The PSC terms are subject to court approval.
"These settlements provide substantial closure to five years of litigation and we are confident that this agreement can be a significant step forward in our efforts to renew our partnership with BP," said Jeremy Thigpen, President and Transocean CEO. "Most importantly, while the litigation is finally coming to an end, it is important that we, as an industry, continue to remember the 11 men who lost their lives in this tragedy, and keep them and their families in our thoughts and prayers."In January, a US federal district court judge in Louisiana ruled that BP’s Macondo well discharged 3.19 MMbbl into the Gulf of Mexico, leaving the UK-major to face maximum fines of $13.7 billion under the US Clean Water Act.
Read more:
Five years after Deepwater Horizon
BP denied US$700 million Transocean claim
Court rules on Macondo oil spill amount
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