BP settles with maker of oil well blowout preventer

NEW ORLEANS — Cameron International, maker of the Deepwater Horizon blowout preventer that failed to stop last year's massive oil spill in the Gulf of Mexico, has agreed to pay $250 million to BP under a legal settlement, BP said Friday.

BP said it was "in their mutual best interests, and the agreement is not an admission of liability by either party." The companies are dropping all claims against one another, they said.

The settlement comes before a federal trial over the catastrophic gulf oil spill. The non-jury trial is to begin in February and determine fault in the April 20, 2010, explosion and subsequent oil spill off the Louisiana coast of more than 200 million gallons of oil.

Oil and gas analysts said they saw Friday's settlement as setting the stage for more out-of-court agreements.

At this point, Halliburton Corp., which supplied the cement to seal the blown-out well, and Transocean Ltd., the drilling company, have not settled with BP. The federal government, individual gulf states and many other plaintiffs also have not settled.

For the companies involved, and government entities, "it's better to make peace than make war," said Fadel Gheit, managing director of Oppenheimer & Co., a Wall Street investment bank. He studies the oil and gas markets and follows BP closely.

But for now, the settlement with Cameron does not end the legal fighting over the blowout of the Macondo well, which was owned by London-based BP and two partners, MOEX and Anadarko. BP has already settled claims with those two companies and a third company, Weatherford, the maker of a part used in the well.

The blowout preventer is the last line of defense in an oil well and is supposed to shear the well and cap it. But the device placed over the Macondo well failed to work properly and choke off the out-of-control spill. Government investigators have said the device had a design flaw and was not maintained properly. A bent pipe also prevented it from working, investigators found.

Investigations of the Deepwater Horizon explosion by the federal government and independent scientists and engineers have found all three companies were at fault for a series of decisions and actions that led to the blowout, the nation's largest offshore oil spill.

BP settles with maker of oil well blowout preventer 12/16/11 [Last modified: Friday, December 16, 2011 10:51pm]

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...