Halliburton Co. and Transocean Ltd. were cleared of gross negligence for their roles in the biggest U.S. offshore oil spill, allowing the companies to avoid the harshest penalties from the 2010 Gulf of Mexico disaster.
U.S. District Judge Carl Barbier ruled today that BP Plc’s exploration unit, which owned the Macondo well, was “reckless” leading up to the accident, which killed 11 people and spewed oil for almost three months into waters that touch the shores of five states. Transocean, which owned the Deepwater Horizon drilling rig, and Halliburton, which provided cement services on the well, weren’t completely cleared of blame -- the judge assigned the companies 30 percent and 3 percent responsibility, respectively.
Barbier’s finding that Halliburton and Transocean were each negligent, and not grossly negligent, “right away limits the fines and penalties that they’re exposed to,” said Rob Desai, an analyst for Edward Jones in St. Louis.
BP had its biggest drop in more than four years on the news, falling 5.9 percent in London. Halliburton, based in Houston, initially rose on the news before falling back 1.5 percent to close at $66.55 in New York. Transocean also gained briefly and then dropped 0.8 percent to $37.76.
BP said it will appeal the ruling. Transocean called the ruling welcome and favorable “as the court has again ratified the industry-standard allocation of liability between drilling contracts and the owners and operators of oil wells.”
Earlier this week, Halliburton agreed to pay $1.1 billion to settle most of the lawsuits over its role in the disaster. Vernier, Switzerland-based Transocean settled some government claims for $1.4 billion last year.
Today’s ruling coupled with its settlement earlier this week means the Macondo case is “essentially over” for the company, Halliburton said in a statement. Halliburton will continue to evaluate various aspects of the rulings and will act appropriately to defend itself in further proceedings.
Halliburton got the outcome it was seeking, Robert Bellinski, an analyst at Morningstar Inc. in Chicago, said in a phone interview. The company made the right decision at the time when it chose to settle, he said.
“It’s bad news for BP and it’s much better news for everybody else,” said David Uhlmann, a law professor at the University of Michigan and former head of the Justice Department’s environmental crimes division.