The Justice Department has reached a $1.4 billion settlement with Transocean Ltd., the owner of the drilling rig that was involved in the deadly BP explosion. The proposed settlement, if approved, will resolve the Justice Department’s civil and criminal probes of Transocean’s role in the Deepwater Horizon rig disaster. The settlement requires the Switzerland-based company to pay $1 billion in civil penalties and $400 million in criminal penalties and to plead guilty to a misdemeanor charge of violating the Clean Water Act.
The settlement, which is subject to a federal judge’s approval, also calls for Transocean to implement a series of operational safety and emergency response improvements on its rigs. Attorney General Eric Holder had this to say about the settlement:
This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster.
Transocean said it believes the settlement is in the best interest of its shareholders and employees and eliminates “much of the uncertainty associated with the accident.” The company said in a statement:
This is a positive step forward, but it is also a time to reflect on the 11 men who lost their lives aboard the Deepwater Horizon. Their families continue to be in the thoughts and prayers of all of us at Transocean.
Much of the $1.4 billion will fund environmental restoration projects and spill-prevention research and training. The company has two years to pay the $1 billion civil penalty. As we have reported previously, Congress approved needed legislation that dedicates 80 percent of the civil penalty for environmental and economic recovery projects in the Gulf states.
It should be noted that the Justice Department’s settlement with BP didn’t resolve the federal government’s civil claims against the London-based oil company. But in its settlement, Transocean does settle its civil exposure. As previously reported, Transocean had reserved $2 billion for paying claims related to the Deepwater Horizon disaster.
While many believe that BP is the most culpable party in the disaster, Transocean also has responsibility for the workers’ deaths and the oil spill. Transocean also said in a September regulatory filing that it had rejected settlement offers last year from BP and from lawyers for Gulf Coast residents and businesses who were hurt by the spill and suffered economic damages.
Judge Barbier will preside over the trial designed to identify the causes of BP’s deadly well blowout and assign percentages of fault to the companies involved. The first phase of the trial is scheduled to start Feb. 25. BP reported profits of more than $25 billion in 2011, but for Transocean the year resulted in a loss of about $5.7 billion. Some of that loss is attributed to contingencies for litigation resulting from the sinking of the Deepwater Horizon rig. A series of government investigations has spread out the blame for the nation’s worst offshore oil spill among BP, Transocean and other partners on the project, including cementing contractor Halliburton.
Halliburton hasn’t settled with the Justice Department, BP or Transocean. The Deepwater Horizon was drilling in water a mile deep and about 50 miles southeast of the Louisiana coast when it exploded on the night of April 20, 2010. The Justice Department contends that Transocean crew members on the rig, acting at the direction of BP supervisors, failed to fully investigate clear signs that the well was not secure. The rig burned for about 36 hours before sinking.
As engineers made repeated attempts to halt the flow of oil from BP’s burst well, millions of gallons of crude flowed into the open Gulf. Marshes, beaches and fishing grounds across the northern Gulf were fouled by the oil. Two BP employees who worked as well-site leaders on the rig were indicted in November on manslaughter charges stemming from the 11 workers’ deaths. The indictment accuses Robert Kaluza and Donald Vidrine of disregarding high-pressure readings that should have indicated trouble before the blowout. No criminal charges have been filed against individual Transocean employees.
Sources: Washington Post and WSFA
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.