independent

Monday 21 April 2014

Transocean '£870m oil spill deal'

The Deepwater Horizon oil rig burning in the Gulf of Mexico (AP)

The US Justice Department is nearing a 1.4 billion dollar (£870 million) settlement with Transocean Ltd, the owner of the drilling rig that sank after an explosion killed 11 workers and spawned the massive 2010 oil spill in the Gulf of Mexico.

Switzerland-based Transocean would pay the money to resolve the department's civil and criminal investigation of the company's role in the Deepwater Horizon disaster, according to sources.

A law enforcement official familiar with the deal said Transocean would pay one billion dollars (£620 million) in civil penalties, 400 million dollars (£248 million) in criminal penalties and would plead guilty to violating the Clean Water Act.

British oil giant BP, which leased the rig from Transocean, already has agreed to pay a record 4.5 billion dollars (£2.8 billion) in penalties and plead guilty to manslaughter and other criminal charges related to the spill. The deal with BP doesn't resolve the federal government's civil claims against the oil company.

In September, Transocean said in a regulatory filing that it had discussed a 1.5 billion dollar (£930 million) settlement with the Justice Department that had to clear several hurdles before it could be completed. The company said one issue was whether a settlement would include claims for environmental damage under the Oil Pollution Act of 1990.

Transocean previously announced it had reserved two billion dollars (£1.24 billion) for paying claims related to the Deepwater Horizon disaster. Transocean also said in the September filing that it had rejected settlement offers last year from BP and a group of lawyers for Gulf Coast residents and businesses who blame the spill for economic damages. Those claims are still pending.

Last month, a federal judge in New Orleans gave final approval to a class-action settlement agreement between BP and a team of private plaintiffs' lawyers. BP estimates it will pay about 7.8 billion dollars (£4.8 billion) to resolve these claims, but the settlement isn't capped.

A series of government investigations have spread out the blame among BP, Transocean and other partners on the project, including cementing contractor Halliburton.

The Deepwater Horizon was drilling in water a mile deep about 50 miles (80 kms) south-east of the Louisiana coast when it exploded on the night of April 20, 2010. The rig burned for about 36 hours before sinking.

www.deepwater.com/ (Transocean)

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