BP Settles With Drilling Fluid Provider Over 2010 Oil Spill

BP Plc (BP/) and M-I Swaco, which provided fluid for the doomed Macondo well, settled all claims against each other over the 2010 oil spill in the Gulf of Mexico, the companies said in a court filing.

M-I, a unit of Schlumberger Ltd. (SLB), has been named as a defendant in hundreds of lawsuits over the spill by businesses, property owners and state governments. M-I said it wasn’t responsible for the Deepwater Horizon rig explosion and that BP and other companies were, according to court papers filed last year.

BP said in a claim filed in June that M-I LLC, also known as M-I Swaco, “failed to provide, control, and monitor the mud and spacer solutions used on the Deepwater Horizon in a reasonably safe manner.” The companies won’t pursue allegations against each other, they said in today’s filing.

BP and M-I “have agreed to mutually dismiss with all prejudice all claims that the parties brought, or could have brought, against each other,” lawyers for the companies said. The filing didn’t mention whether either company would be making a payment.

The Macondo well blowout and the explosion that followed killed 11 workers. The sinking of Transocean (RIG)’s Deepwater Horizon drilling rig and subsequent spill led to hundreds of lawsuits against London-based BP and its partners and contractors.

U.S. District Judge Carl Barbier in New Orleans, who’s overseeing much of the spill litigation, has scheduled a nonjury trial for Feb. 27 to determine liability and apportion fault for the disaster. M-I remains a defendant in the trial.

Merger

“BP and M-I Swaco’s claims against each other relating to the Deepwater Horizon incident have been mutually and voluntarily dismissed,” Stephen T. Harris, a Schlumberger spokesman, said in an e-mailed comment. “Terms of the settlement are confidential.”

“MI-Swaco is a valued supplier,” said Scott Dean, a BP spokesman, in an e-mailed statement.

M-I Swaco became part of Schlumberger in August 2010 as a result of its merger with Smith International, according to company’s website.

BP previously settled with its partners in the well, Anadarko Petroleum Corp. (APC), Mitsui & Co.’s MOEX Offshore 2007 LLC, and Cameron International Corp. (CAM), maker of blowout prevention equipment used for the project.

Spill Claims

Houston-based Cameron reported Dec. 16 that it had agreed to pay BP $250 million in exchange for the oil company’s indemnifying it from damage claims. The settlement doesn’t cover fines, penalties or punitive damages.

Anadarko, which had a 25 percent share in the Macondo well, agreed in October to pay BP $4 billion to settle oil spill claims. MOEX, which had a 10 percent share, settled for $1.07 billion in May.

The settlements don’t cover possible fines. Mitsui’s MOEX unit settled government claims over Clean Water Act violations for $90 million today. Barbier has ruled that MOEX and Anadarko can’t be sued for punitive damages.

The lawsuit is part of In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.