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Transocean, U.S. Justice Department Discussed $1.5 Billion Settlement

Source: AP

Posted on 11 Sep 2012 by Neilson

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TransoceanTransocean Ltd. and the U.S. Justice Department have discussed a $1.5 billion settlement that would resolve federal civil and criminal claims against the company over its role in a deadly 2010 rig explosion that led to the nation's worst offshore oil spill.

But Switzerland-based Transocean said in a regulatory filing Monday that several issues, including the possible time period for payment, must be resolved before a deal can be completed.

"There can be no assurance that the parties will enter into agreements on the terms described or at all," Transocean said in its filing with the Securities and Exchange Commission.

A Justice Department spokesman declined to comment.

Transocean owned the Deepwater Horizon drilling rig, where 11 workers died in an April 2010 explosion triggered by a blowout of BP PLC's Macondo well.

Transocean also says it rejected settlement offers earlier this year from BP and a group of private attorneys for Gulf Coast residents and businesses who blame the spill for economic damages. Transocean said it didn't make any counterproposals and hasn't had settlement talks with either side since February.

"The settlement amounts proposed by both BP and the (plaintiffs' attorneys) were each far in excess of the amount contemplated by our current settlement discussions with the Department of Justice," Transocean's filing says.

Transocean previously announced it had reserved $2 billion for paying claims related to the Deepwater Horizon disaster. Monday's filing says the company doesn't expect to exceed that amount.

Another sticking point is whether a settlement would include claims for environmental damage under the Oil Pollution Act of 1990, according to Transocean.

The SEC filing indicates Transocean may be closer to a settlement with the federal government than BP. In a strongly worded court filing last week, the Justice Department renewed its vow to prove at trial that BP engaged in gross negligence or willful misconduct leading up to the rig blast.

In May, U.S. District Judge Carl Barbier in New Orleans preliminarily approved a proposed class-action settlement agreement between BP and the plaintiffs' attorneys. BP estimates it will pay about $7.8 billion to resolve these claims, but the settlement isn't capped.

BP said Monday it is selling some deep-water assets in the Gulf to Plains Exploration & Production Co. for $5.55 billion, a big step in BP's drive to cover the cost of the oil well blowout and concentrate investment elsewhere.


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