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Deepwater Horizon rig owner to pay $1.4B for Gulf of Mexico oil spill in 2010

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By The Los Angeles Times
Thursday, Jan. 3, 2013, 8:00 p.m.

WASHINGTON — The offshore oil and gas drilling company Transocean has agreed to a $1.4 billion settlement with the Justice Department to resolve civil and criminal claims against the company for its role in the April 2010 Gulf of Mexico oil spill.

Transocean owned the Deepwater Horizon drilling rig leased by BP. The rig exploded and sank after the Macondo well blew out, killing 11 workers and spewing nearly 5 million barrels of oil into the gulf.

In a statement, Transocean said that as part of the settlement, a “subsidiary has agreed to plead guilty to one misdemeanor violation of the Clean Water Act (CWA) for negligent discharge of oil into the Gulf of Mexico and pay $1.4 billion in fines, recoveries and penalties, excluding interest.”

Along with BP, Transocean was criticized repeatedly by various independent panels that reviewed the spill for its role in a highly dangerous deep-water drilling project that was marked by lax safety, poor communication and ad hoc decision-making.

In November, BP agreed to pay a $4 billion criminal fine — the largest in U.S. history — and two of its employees were charged with manslaughter in connection with the deaths of the Deepwater Horizon workers.

The Transocean settlement concludes the Justice Department's criminal investigation of the company and resolves civil claims against it.

“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,” said Attorney General Eric Holder Jr.

The $1 billion civil penalty is the largest civil environmental penalty to date, according to David Uhlmann, a former chief of the Justice Department's environmental crimes section and a law professor at the University of Michigan. Some of the money will go to coastal habitat restoration efforts and to research into oil spill prevention by the National Academy of Sciences, Transocean said.

Uhlmann commended the Justice Department for the $1 billion civil penalty but questioned aspects of the criminal settlement, including the much smaller criminal fine of $400 million.

“The Justice Department typically tries to get at least the same amount for a criminal violation as a civil one because the thinking is that criminal behavior constitutes more serious misconduct,” Uhlmann said. “It's also surprising that the Justice Department decided not to charge Transocean with manslaughter, since the same negligence that caused the oil spill caused the death of 11 Transocean employees.”

The next major legal dispute that needs to be resolved is the scope of the civil penalties against BP. A trial is set for February, but the charges could be settled before then.

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