Thursday, December 14, 2017
Business

Feds reach $1.4 billion settlement with Transocean over gulf oil spill

Transocean Ltd. will pay more than $1.4 billion, including a $400 million criminal penalty, to settle federal claims arising from the 2010 Gulf of Mexico oil spill, according to a court filing.

Transocean will plead guilty to one count of violating the Clean Water Act, according to a consent decree between the company and the government filed Thursday in federal court in New Orleans. Transocean of Vernier, Switzerland, will pay $1 billion plus interest in civil penalties, according to the filing.

The U.S. sued Transocean in 2010, alleging violations of federal pollution law. Transocean was the owner and operator of the Deepwater Horizon oil rig, which burned and sank in the Gulf of Mexico in April 2010 after BP's Macondo well exploded, setting off the largest offshore oil spill in U.S. history.

The blowout and explosion aboard Transocean's drilling rig killed 11 workers and sent millions of barrels of crude leaking into the gulf.

Under the agreement, Transocean must establish a technology innovation group to focus on drilling safety, devoting a minimum of $10 million to this effort.

"This agreement holds Transocean criminally responsible for its conduct," U.S. Attorney General Eric Holder said in a statement. "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."

The settlement will end the Justice Department's criminal investigation of Transocean, the company said. Transocean said it had accrued an estimated loss contingency of $1.5 billion for Justice Department claims as of Sept. 30.

"I'm glad they're holding accountable not just BP, but everybody who was responsible for the oil spill," Sen. Bill Nelson, D-Fla., said in an emailed statement. "The folks along the Gulf Coast deserve no less."

Nelson coauthored the RESTORE Act, which directs the lion's share of civil fines collected as a result of the spill directly back to Gulf Coast communities for environmental and economic restoration.

The agreement doesn't cover costs to Transocean for natural resources damage under the Oil Pollution Act of 1990, the company said. That requires responsible parties to reimburse governments for the cost of restoring natural resources to pre-incident conditions.

The U.S. District Court overseeing spill litigation previously determined that Transocean wouldn't be liable "under the Oil Pollution Act for damages caused by subsurface discharge from the Macondo well," the company said in its statement. This decision, if upheld, would limit Transocean's liability for such damages, the company said.

BP previously agreed to pay $4 billion to the Justice Department to resolve charges connected to the spill and $525 million to settle the U.S. Securities and Exchange Commission's claim that the company misled investors about the rate of oil flowing into the gulf.

BP has also agreed to pay an estimated $7.8 billion to settle most private plaintiffs' claims related to the explosion of the Deepwater Horizon and subsequent spill.

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