Transocean, the owner of the Deepwater Horizon drilling rig that sank in the Gulf of Mexico last year, is planning to take further legal action against BP as it seeks to prove that the British company should be liable for almost all the costs of the disaster.
Legal arguments from Transocean, which could be filed in the next few days, will be based on the contract that it signed with BP to work on the Macondo well, which it says protects it against claims for damages, fines and other penalties.
BP has already taken a charge of $41.3bn for clean-up, compensation and other costs, and has sued Transocean for at least $40bn – alleging that the spill was “caused by Transocean’s multiple failures”.
Both BP and Transocean were found by official inquiries to have been at fault over the accident on April 20 last year that killed 11 men and caused the largest ever accidental oil spill.
However, BP signed a contract that agreed to “protect, release, defend, indemnify and hold harmless” Transocean, its drilling contractor, from “all claims, demands, causes of action, damages, costs, expenses …judgments and awards of any kind of character, without limit and without regard to the cause or causes thereof”.
The contract specified that the indemnity held even in the event of gross negligence.
BP this month agreed a deal with Anadarko Petroleum, owner of 25 per cent of the Macondo well, which will see Anadarko pay $4bn as its share of the costs.
But Swiss-based Transocean believes it is in a very different legal position. It accepts responsibility for some costs – including compensation for the 11 deaths and damage caused by about 17,000 barrels of diesel fuel in the rig’s tanks, which may run into the tens of millions of dollars.
However, it argues that most of the costs, including fines and penalties from the US government, come from the oil that flowed out of BP’s well.
Transocean said in a statement: “Through legally binding contracts with both Transocean and the US government, BP agreed to assume full responsibility for the costs and liability of any pollution … caused by hydrocarbons that leaked from the Macondo well.”
BP argues that no court would protect Transocean against fines and charges handed down by the US authorities, saying: “If Transocean has materially breached the contract containing the indemnity or prejudiced BP’s rights, then Transocean cannot take advantage of the indemnification clauses.”
Transocean believes that if it is forced to bear a high proportion of the costs of the disaster, in spite of the contract between it and BP, it would make operations in the oil industry impossible because service companies would be unwilling to bear the risks of an accident.
All civil actions will come to trial in the multi-district litigation in New Orleans, starting on February 27 next year.
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