Transocean Pleads Guilty and Agrees To Pay $1.4 Billion to Resolve Deepwater Horizon Claims

Posted in Deepwater Horizon,Maritime Lawsuits,Transocean on January 7, 2013

NEW ORLEANS, La. — On Thursday Jan. 3, Transocean pleaded guilty to environmental crime and agreed to pay $1.4 billion in penalties and fines to resolve claims over Deepwater Horizon.

The Justice Department said in a statement that by pleading guilty, Transocean admits its Deepwater Horizon crew members “were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.”

Transocean was the owner of the drilling rig that exploded on April 20, 2010, killing 11 oil rig workers causing the largest oil spill in U.S. history.

Prosecutors said that transocean had violate the Clean Water Act.

According to Courtroom News, a proposed partial civil consent decree was filed simultaneously with criminal information in U.S. District Court for the Eastern District of Louisiana.

In addition to a $1 billion penalty to resolve those claims, Transocean will also pay $400 million in criminal fines and penalties. It must also continue cooperating with the government’s ongoing criminal investigation. Claims for natural resource damages and cleanup costs are not covered in the deal.

Of the criminal fines, $150 million will go toward marine, coastal and wildlife conservation. An additional $150 million will be used to fund improved oil spill prevention and response efforts.

The Justice Department says the $1 billion civil penalty is “a record amount that significantly exceeds last year’s $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture.”

Of this penalty, 80 percent will go toward fund environmental and economic projects for Gulf states.

Transocean must also improve the operational safety and emergency response capabilities at all their U.S. drilling rigs under the settlement.

The proposed civil settlement is subject to a public comment period and final court approval.

Blog post by Louisiana maritime lawyer, Gordon, Elias & Seely.