Transocean Shares Blame for BP Spill, Lawyers Say

Transocean Ltd. shares liability for the BP Plc oil spill because faulty sensors, alarms and well- control equipment on its Deepwater Horizon drilling rig failed to prevent the explosion, victims’ lawyers said.

Transocean, which owned the rig that exploded and sank off Louisiana in April, is seeking to limit its liability exposure to $27 million under a 160-year-old law that restricts maritime damages unless the vessel owner is found partially responsible for the disaster. The explosion killed 11 workers and set off the largest offshore oil spill in U.S. history.

Transocean’s limitation proceeding is the first set for trial before the New Orleans federal judge overseeing more than 400 consolidated lawsuits over the explosion at the BP Plc-owned well and the subsequent Gulf of Mexico oil spill. The lawsuits seek billions of dollars in damages from alleged environmental, economic and personal injuries. That trial will begin in February of next year.

Transocean “bypassed or disabled key safety systems” on the rig, “including a gas safety valve and fire alarm system that were intended to monitor for fire and explosive and toxic gases, with utter disregard for the safety ramifications,” victims’ lawyers said in a amended master complaint filed today in federal court in New Orleans.

Share Blame

Had the rig crew not “disabled the alarm systems, the system would have sounded before the explosion, shut down all potential ignition sources, and activated the drilling vessel’s emergency disconnect system, which would have prevented the explosion,” Stephen Herman and James Roy, who speak for lawyers leading the consolidated spill litigation, said in the complaint.

BP has publicly asserted that Transocean and other contractors who provided services to its subsea well share blame for the explosion. Transocean has said BP is responsible for all damages as the well’s owner and operator.

“With respect to our contractual relationship with BP, under Transocean’s drilling contract for the Macondo well, BP has agreed to assume full responsibility for the costs and the liability of pollution and contamination,” Lou Colasuonno, a spokesman for Transocean, said in an e-mail. “That contract is clear.”

Transocean “made and/or acquiesced to a host of reckless decisions concerning well design, cementing and integrity testing that prioritized speed and cost-savings over safety and industry best practices,” Herman and Roy said. “BP and Transocean focused primarily on profit while disregarding public and environmental health and safety” in how they chose to drill the well.

Blowout Preventer

The rig owner also knowingly violated procedures to properly service the Deepwater Horizon’s blowout preventer, a towering stack of subsea valves that failed to shut in the well once the blowout began, according to the complaint.

Transocean ordered an independent engineering assessment of the Deepwater Horizon’s blowout preventer in 2005, after maintenance logs showed the mechanism gave “unusual pressure readings and flashed inexplicable alarm signals” while leaking fluid, the complaint said.

That inspection -- which was to include verification that the blowout preventer’s sheer rams worked properly in ultra-deep water --wasn’t completed “because the BOP was in use and inaccessible on the sea floor, and petitioners would not stop work to bring it to the surface,” the lawyers said.

10 Distinct Categories

Herman and Roy divided victims of the rig explosion and oil spill into 10 distinct categories, based on the nature of their injuries or claimed losses. For the first time, the lawyers included in the litigation claims by individuals and businesses alleging damages sustained as a result of the Obama Administration’s offshore drilling bans, which halted deep-water drilling in the Gulf of Mexico in reaction to the spill.

“The moratorium claimants also suffered severe economic hardship as a result of the spill,’’ the lawyers said. “These claimants include deepwater drilling rig workers, rig support personnel, transport personnel and indirect support workers such as restaurant employees and fueling personnel,’’ who have suffered losses and damages as the result of the drilling ban.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 4:10-md-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net.

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