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Transocean discussed $1.5 billion oil spill settlement with DOJ

Alison Sider, Dow Jones Newswires
 
HOUSTON--Transocean Ltd. disclosed in a filing made to the Securities and Exchange Commission Monday that it has discussed a $1.5 billion settlement with the U.S. Department of Justice to resolve its civil and criminal claims relating to the Deepwater Horizon disaster.

The company said in the filing that it still has fundamental issues to be worked out before it can reach an agreement with the department, including the factual basis of a plea, whether certain claims will be included in a settlement, and the time period for payment.

But if there is a settlement, Transocean said it will likely not exceed the $2 billion the company has already set aside to cover that cost. In April 2010, a blow-out at the well drilled by the Transocean-owned Deepwater Horizon rig, which was leased by BP PLC, killed 11 and unleashed the worst offshore oil spill in U.S. history.

The company said settlement negotiations with BP and a group of thousands of plaintiffs have been on ice since February, when both made offers that were well above what Transocean is willing to pay. The proposals were also much more than what Transocean had discussed with the Justice Department, Transocean said.

In a filing made last week in response to BP' s request to accept a $7.8 billion settlement between the company and the Plaintiffs Steering Committee over economic losses and property damage, the Department of Justice said that Transocean committed "acts and omissions" that were inextricably linked with BP' s "gross negligence and wilful misconduct."

BP denies those claims. A spokesman for Transocean did not immediately respond to a request for comment.

Raymond James analyst Collin Gerry said Transocean' s disclosure Monday didn' t answer many questions about when a settlement could be reached.

"It doesn' t seem like the timeline has been accelerated," Mr. Gerry said. The filing "gives some certainty regarding the actual liability but the timeline is still unknown."

09/10/2012

 

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