Transocean Blamed in BP Suit for Billions in Damages on Spill Anniversary
Transocean Ltd. (RIG), the owner and operator of the Deepwater Horizon drilling rig that exploded one year ago yesterday, was sued by BP Plc (BP/) for billions of dollars in damages related to the Gulf of Mexico oil spill.
BP said in a complaint filed yesterday in federal court in New Orleans that it has incurred costs of $17.7 billion and that it took a pretax charge last year of $40.9 billion in relation to the spill. The London-based company said that without Transocean’s “misconduct,” there wouldn’t have been any explosion, fire, deaths or oil spill.
“The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed, resulting in the casualty,” BP said in its complaint.
The Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The accident and spill led to hundreds of lawsuits against BP and its partners and contractors. BP’s filing yesterday came as part of a series of complaints and counterclaims by plaintiffs and defendants meeting a deadline set by the federal judge overseeing the suits.
The lawsuits also name as defendants Halliburton Co. (HAL), which provided cementing services, and BP’s minority partners in the well, Anadarko Petroleum Corp. (APC) and Mitsui & Co.’s Moex Offshore LLC unit. U.S. District Judge Carl Barbier has scheduled a nonjury trial for February 2012 to determine fault.
‘Specious and Unconscionable’
BP accused Transocean, based in Switzerland, of breaching its contractual duties, including failing to adequately maintain the drilling rig and fix earlier engine problems and failing to train its crew and properly coordinate efforts to fight fires on the vessel.
“This suit is specious and unconscionable,” Lou Colasuonno, a Transocean spokesman, said in an e-mailed statement. “The Deepwater Horizon was a world-class drilling rig manned by a top-flight crew that was put in jeopardy by BP, the operator of the Macondo well, through a series of cost- saving decisions that increased risk -- in some cases, severely.”
BP’s complaint was its “latest desperate bid” to turn its back on an agreement with Transocean to assume full responsibility for the costs of the spill damage, Colasuonno said.
Transocean yesterday filed cross-claims against its former partners in the Macondo well project, accusing BP of failing “to honor its contractual commitments,” said Kerry Miller, a Transocean attorney. BP has failed to indemnify Transocean against lawsuits for death, personal injury and pollution, as required by its drilling contract, Miller said.
Also yesterday, BP sued Cameron International Corp. (CAM) over allegations that that company’s blowout-prevention equipment was a cause “in whole or in part” of the well blowout and spill.
Cameron’s design and manufacture of the blowout preventer, or BOP, “used on the Deepwater Horizon, as well as Cameron’s maintenance and modification of that BOP, did not meet the standards of a reasonable manufacturer and service provider,” BP said in a filing. The blowout preventer “failed to properly operate when needed and was unreasonably dangerous when used as intended,” BP said.
BP is seeking damages from Cameron for providing an allegedly defective product, as well as contributions for any money the oil company has to pay for claims under the Oil Pollution Act, BP said in the filing. BP said it has committed to paying all legitimate claims while reserving the right to collect from Cameron or other responsible parties.
Cameron said in court filings last week that the explosion wasn’t its fault because oil and gas were already surging toward the rig when workers tried to activate the blowout-prevention equipment to seal the well. “Hydrocarbons had entered the riser well before the crew attempted to activate the BOP, and even a perfectly functioning BOP could not have prevented the explosions,” Cameron said in its April 15 filing.
Plaintiffs suing the companies over the spill have claimed Houston-based Cameron’s BOP wasn’t designed to handle the extreme environment and thicker drill pipes found in ultra-deep wells. BP claims the blowout preventer was defectively designed and incapable of working as expected.
“It is not surprising that the companies are filing to protect their indemnity rights,” Rhonda Barnat, a Cameron spokeswoman, said in an e-mail.
Cameron has also filed claims “in order to protect ourselves,” she said.
BP also accused the Halliburton unit that provided cementing services for the well of “improper conduct” before the blast. BP said a Halliburton engineer and others at the Houston-based company concealed problems with its “foam cement slurry” from BP before and after the explosion.
“Halliburton could not have caused the resulting damage without concealing from BP material facts and expert opinions about its cement slurry, including its properties, weaknesses and its likelihood of failure,” according to a BP complaint against Halliburton Energy Services, filed yesterday.
Three days after the explosion, “Halliburton falsely told BP that the cement job was completed successfully” and “repeated those false assertions to the world,” BP said in its complaint.
Halliburton filed claims against BP, Transocean and the other contractors, claiming any damages resulting from the blowout or spill were “proximately caused by the actions and/or omissions” of the other parties “and not by any conduct on the part of Halliburton Energy Services.”
“BP decided on the well design. BP decided when to conduct rig activities,” Halliburton said in a complaint. “BP decided what products and services to use, and whether to accept or reject its contractors’ recommendations regarding those products and services.”
Halliburton claimed indemnity for any damages it might be assessed.
“Halliburton remains confident that we executed our work on the Macondo well under BP’s direction and according to their plan,” Cathy Mann, a company spokeswoman, said in an e-mail. “The claims we have filed against BP confirm that we are seeking simply to enforce the indemnity BP provided to Halliburton in our contract with them.”
Nalco Holding Co. (NLC), which supplied the chemical dispersant Corexit, used to break up the spilled crude, filed a claim yesterday against the U.S. government, which the company said was “directing and controlling the response to the oil spill.”
Nalco faces suits from fishing interests claiming the dispersants further fouled the ocean and from spill-response workers claiming injury from contact with the toxic chemicals.
More than 1.8 million gallons of dispersants were pumped into deep Gulf waters at the leaking wellhead or sprayed by boats and aircraft onto oiled waters and shoreline. As a government-approved contractor, Naperville, Illinois-based Nalco says, it’s entitled to contribution or indemnity from the U.S. for any damages caused by its product.