The United States hit drilling rig operator Transocean with $1.4 billion in criminal and civil fines Thursday for its role in the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
Nearly two months after oil giant BP was fined $4.5 billion for its leading role in the disaster, Transocean agreed to plead guilty to violating the Clean Water Act and pay the fines, the Justice Department said.
The blowout on its drilling rig Deepwater Horizon on April 20, 2010, killed 11 and sent some 4.9 million barrels of oil into the Gulf, one of the country’s most devastating environmental disasters.
The Transocean vessel was drilling the well for BP at the time, and both companies had pointed the finger at the other as responsible.
In pleading guilty, the department said, Transocean admitted its rig crew was “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.”
The firm was ordered to pay $400 million to resolve criminal charges and another $1 billion in civil penalties, partly to fund spill prevention and environmental restoration in the five states hit by the three-month-long spill.
“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them,” said Assistant Attorney General Lanny Breuer.
“Transocean’s agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster.”
Transocean said in a statement that the agreements to plead guilty and pay the fines had removed much of the uncertainty about its operations from the case.
“This is a positive step forward, but it is also a time to reflect on the 11 men who lost their lives aboard the Deepwater Horizon. Their families continue to be in the thoughts and prayers of all of us at Transocean.”
The company said it remained potentially subject to claims related to the assessment of damages to natural resources in the region from the spill but that those claims could be limited depending on ongoing court reviews.
Transocean said it had already set aside a loss contingency of $1.5 billion, and would pay the fines out over five years, with some $1 billion to be paid in 2013 and 2014.
In afternoon New York trade Transocean’s shares were up 6.3 percent at $49.16.
The fines were still small compared with those aimed at BP, the main operator of the well.
In a statement BP said the Justice Department settlement vindicated its view that Transocean was also at fault, adding that another oilfield service company working on the well at the time, Halliburton, was also responsible.
“In settling, Transocean has acknowledged that it played a significant role and has responsibility for the accident. Transocean is finally starting, more than two-and-a-half years after the accident, to do its part for the Gulf Coast,” BP said.
“Unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well.”
BP set a deal with US prosecutors on November 15 to settle a criminal investigation by paying $4.5 billion and pleading guilty to 11 counts of manslaughter, one count of felony obstruction of Congress and two environmental violations.
It must still resolve a civil case on environmental fines which could amount to as much as $18 billion if gross negligence is found. It also remains on the hook for economic damages, including the cost of environmental rehabilitation.
Also in November three former BP employees pleaded not guilty to criminal charges related to the disaster. Two supervisors on the rig at the time rejected manslaughter charges, saying they were being treated as scapegoats, and a senior BP executive at the time denied he obstructed justice by lying about the volume of oil leaking from the runaway well.