Transocean Appears in Court After $1.4 Billion Spill Pact
Transocean Ltd. (RIG) appeared in federal court in New Orleans after reaching a $1.4 billion settlement with the U.S. over the 2010 Gulf of Mexico oil spill.
Transocean didn’t enter a plea today in its first court appearance following announcement of the settlement. It will enter a guilty plea at a later hearing Feb. 14. U.S. prosecutor Derek Cohen read the charge against the Vernier, Switzerland- based company at the hearing.
Transocean owned and operated the Deepwater Horizon oil rig, which burned and sank in the gulf in April 2010 after BP Plc (BP/)’s Macondo well exploded, killing 11 people and setting off the largest offshore oil spill in U.S. history. The U.S. sued Transocean in 2010, alleging violations of pollution law.
The company agreed last week to plead guilty to a misdemeanor count of violating the Clean Water Act and to pay $400 million in criminal fines and $1 billion plus interest in civil penalties. Under the agreement, Transocean will undergo five years’ probation and establish a technology innovation group to focus on drilling safety, devoting a minimum of $10 million to this effort.
“The purpose of this hearing is to advise the company of the nature of the charge against it and to set future dates,” U.S. Magistrate Judge Sally Shushan said today. The Feb. 14 arraignment will be before U.S. District Judge Jane Triche Milazzo.
Brad D. Brian and Michael R. Doyen appeared as criminal defense attorneys for Transocean, along with local defense attorney Kerry Miller.
Transocean said last week that the settlement will end the U.S. Justice Department’s criminal investigation of the company over the spill. Transocean said it had accrued an estimated loss contingency of $1.5 billion for Justice Department claims as of Sept. 30. The settlement payments and interest aren’t deductible for tax purposes, the company said.
The agreement doesn’t cover costs to Transocean for natural-resources damage under the Oil Pollution Act of 1990, the company said. That law requires responsible parties to reimburse governments for restoring natural resources to pre- incident conditions.
Transocean said last week that the company’s liability for these damages was limited by a 2012 court ruling that it wouldn’t be liable under the Oil Pollution Act for subsurface discharge from the well.
The blowout and explosion aboard Transocean’s drilling rig sent millions of barrels of crude leaking into the gulf. The accident prompted hundreds of lawsuits against Transocean, London-based BP, the well’s owner, and Houston-based Halliburton Co. (HAL), which provided cementing services.
BP previously agreed to pay $4 billion to the Justice Department to resolve charges connected to the spill and $525 million to settle the U.S. Securities and Exchange Commission’s claim that the company misled investors about the rate of oil flowing into the gulf.
BP announced Nov. 15 that it reached a deal with the Justice Department to plead guilty to 14 counts, including 11 for felony seaman’s manslaughter. U.S. District Judge Sarah S. Vance said last month that she would determine at a Jan. 29 hearing whether to accept BP’s plea.
The criminal case is U.S. v. Transocean Deepwater Inc., 13- cr-001, U.S. District Court, Eastern District of Louisiana (New Orleans).
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