Transocean, U.S. discussing $1.5 billion spill settlement

Reuters News
Posted: Sep 10, 2012 11:31 AM

(Reuters) - Transocean Ltd is in discussions with the U.S. Justice Department to pay $1.5 billion to resolve civil and criminal claims from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, the Swiss-based company said on Monday.

Parties have been unable to reach an agreement so far on the settlement, which could be paid "over a period of years," Transocean, owner of the world's largest offshore drilling fleet, said in a filing with the U.S. Securities and Exchange Commission.

Transocean owned the Deepwater Horizon drilling rig and BP Plc was the operator of the Macondo well, which ruptured on April 20, 2010, killing 11 workers and unleashing the worst-ever U.S. offshore oil spill. London-based BP is also in talks with the Justice Department to resolve criminal and civil claims.

Transocean has reserved $2 billion to cover charges arising from a potential settlement, and said it does not expect any incremental charges to earnings. A Transocean spokesman had no immediate comment on the filing, and a Justice Department spokesman declined to comment.

Unresolved issues include whether a settlement would include environmental damages under the Natural Resource Damage Assessment process, the timing of payments and the factual basis of a plea, Transocean said in its filing.

According to the Justice Department, both BP and Transocean made errors that led to the explosion and sinking of the Deepwater Horizon rig and rupturing of the Macondo well, which spewed 4.9 million barrels of oil into the Gulf of Mexico over 87 straight days.

Transocean has also negotiated with both BP and private plaintiffs to reach a separate settlement, but no discussions on those issues have taken place since February 2012, the filing said. Settlements proposed by BP and the plaintiffs group were "far in excess" of the settlement amount under consideration with the Justice Department, it said.

Transocean faces liability from over 100,000 individuals and business owners, represented by the plaintiffs steering committee, who are claiming economic and medical damages from the spill.

BP in March reached an estimated $7.8 billion deal to resolve its liability with the plaintiffs, a wide-ranging group that represents condominium owners, fishermen, hoteliers, restaurant owners and others who say their livelihood was damaged by the spill.

(Additional reporting by David Ingram in Washington and Braden Reddall in San Francisco; Editing by Gerald E. McCormick, David Gregorio and Carol Bishopric)