BP must pay some of Halliburton’s Gulf spill costs
WASHINGTON — A US court ordered British oil giant BP Tuesday to pay oilfield services company Halliburton for some of the claims stemming from the massive 2010 Gulf of Mexico oil spill.
In a ruling in Louisiana on Tuesday, a federal judge ruled BP must “indemnify Halliburton for third party compensatory claims that arise from pollution or contamination that did not originate from the property or equipment of Halliburton.”
But the judge said BP would not have to pay Halliburton, one of the world’s largest oilfield services companies with headquarters in Houston and Dubai, for its legal fees or for potential fines it might sustain.
The same judge last week ruled in a similar fashion saying BP must cover some of the eventual claims against rig owner Transocean arising from the spill.
The mixed ruling found BP must indemnify the Swiss drilling rig operator from “compensatory damages” related to the 2010 spill even if the pollution and its impacts are the result of Transocean’s “gross negligence.”
But BP does not need to cover any punitive damages or civil penalties that may be assessed under the US Clean Water Act, nor is it responsible for covering the costs of Transocean’s legal fees, Judge Carl Barbier ruled.
An explosion on the BP-leased Deepwater Horizon rig killed 11 people on April 20, 2010. The rig then sank and the Macondo well gushed oil into the ocean for 87 days, blackening the US Gulf shoreline and crippling the local tourism and fishing industries.
By the time the exploratory well was capped, some 4.9 million barrels (206 million gallons) of oil had spilled out of the runaway well 5,000 feet (1,500 meters) below the surface of the Gulf of Mexico.
BP posted a $40 billion charge to cover the cost of the massive cleanup, compensation to fishermen and thousands of others affected by the spill and various government fines.
It has been locked in legal battles with Transocean and Halliburton — which was responsible for the runaway well’s faulty cement job — in order to shift some of the huge costs to its subcontractors.
Halliburton, reached for comment, did not immediately react to the ruling.
But in a statement, BP welcomed the decision to split the cost of the disaster among it and its two main contractors Transocean and Halliburton.
The ruling “is a strong signal that contractors involved in critical well operations will be held accountable for their actions under the law,” the compamy said.
“BP has acknowledged its role in the accident and has paid more than $7.8 billion in claims, advances and other payments to individuals, businesses and governments, regardless of whether third parties ultimately would be responsible for any of that sum or additional liabilities,” it stressed.
Morgan Stanley has estimated BP will end up paying $20 to $25 billion to the US government in order to settle a host of civil and criminal lawsuits arising out of the 2010 disaster.