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BP and Transocean continue to blame each other for the accident
27/01/2012
BP setback over Deepwater costs
Transocean won’t pay in full even if negligent
Claudia Flavell-While
BP will have to cover some of the costs of the Deepwater Horizon disaster itself, even if drilling contractor Transocean is found guilty of gross negligence, a US judge has ruled.
US District judge Carl Barbier ruled on 26 January that BP will have to pay for damages and any civil penalties brought as a result of oil spilt below the water surface. Transocean can however still be made to pay for charges brought under the Clean Water Act and the Oil Pollution Act, which covers the cost of cleaning up beaches and other damages resulting from cleaning up the oil.
The ruling upholds part of the indemnity agreement BP signed with Transocean when it leased the drilling rig, under which BP indemnified Transocean from all claims, costs and judgements, irrespective of their cause, even if Transocean was found to have acted with gross negligence – something this ruling did not offer an opinion on.
However the judge argued that the ongoing court cases should serve as a deterrent to other companies that might act recklessly, and therefore Transocean will not be protected from all potential claims. The company also has to pay its own legal fees when the trial on damages from the 2010 spill begins in February.
While the ruling ensures that Transocean alone cannot be held liable for paying the cleanup costs and fines, which could reach tens of billions of dollars, BP nevertheless welcomed the verdict.
“Today’s ruling makes clear that contractors will be held accountable for their actions under the law,” the company said in a statement. “While all official investigations have concluded that Transocean played a causal role in the accident, the contractor has long contended it is fully indemnified by BP for the liabilities resulting from the oil spill. The court rejected this view.”
The company added: “As we have said from the beginning, Transocean cannot avoid its responsibility for this accident.”
Transocean, meanwhile, said: “This [ruling] confirms that BP is responsible for all economic damages caused by the oil that leaked from its Macondo well and discredits BP’s ongoing attempts to evade both its contractual and financial obligations.”
BP points out that since the spill it has paid more than US$7.8b in claims, advances and other payments to individuals, businesses and governments. In total, it has so far spent US$14b to repair the leak and clean up the oil, and has earmarked another US$20b for damages.
