Transocean Guilty Plea Over Gulf Spill Accepted by JudgeAllen Johnson Jr. and Margaret Cronin Fisk
Transocean Ltd. and federal prosecutors won approval of the oil driller’s agreement to plead guilty to violating the U.S. Clean Water Act for its role in the April 2010 Gulf of Mexico oil spill.
Transocean, the Vernier, Switzerland-based owner of the Deepwater Horizon oil rig that burned and sank in the Gulf, agreed last month to pay a $400 million criminal fine and $1 billion in civil penalties to the U.S. Transocean pleaded guilty to one misdemeanor count.
U.S. District Judge Jane Triche Milazzo gave final approval of the plea at a hearing today in New Orleans.
“Based on the evidence before me, I believe the plea agreement is reasonable and is accepted,” the judge said. She said she received no letters opposing the plea agreement and no witnesses showed up at the hearing to object to it.
Transocean rose 3.9 percent to $59.30 in New York.
Transocean was the owner and operator of the Deepwater Horizon oil rig, which sank in the Gulf of Mexico after BP Plc’s Macondo well exploded, setting off the largest offshore oil spill in U.S. history.
The explosion aboard Transocean’s rig killed 11 workers and sent millions of barrels of crude oil spewing into the gulf. The accident prompted hundreds of lawsuits against Transocean, London-based BP and Houston-based Halliburton Co., which provided cementing services.
Transocean’s criminal fine is the second-highest assessed over an environmental disaster, prosecutors and lawyers for the company said in court papers last week. The highest was BP’s $1.26 billion fine in connection with the same spill.
Under the plea agreement, Transocean must establish a technology innovation group to focus on drilling safety and devote at least $10 million in funding to the program.
“The Deepwater Horizon explosion was a senseless tragedy that could have been avoided,” Assistant U.S. Attorney General Lanny A. Breuer said today in a statement.
“Eleven men died, and the Gulf’s waters, shorelines, communities and economies suffered enormous damage,” Breuer said. “With today’s guilty plea, BP and Transocean have now both been held criminally accountable for their roles in this disaster.”
BP agreed in November to pay a total of $4 billion to resolve a federal criminal probe of its role in 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. The oil company pleaded guilty to 14 counts, including 11 for felony seaman’s manslaughter.
“The court notes that Transocean has paid approximately $22 million in claims brought in the multidistrict litigation and settled 90 of the 99 personal injury claims” pending, Milazzo said.
She said among the factors in her decision approving the agreement was the size of the fine and the criminal history of the defendant.
“Transocean has a much less-serious criminal history than BP,” the judge said.
Transocean’s misdemeanor plea to one count of violating the Clean Water Act doesn’t cover the company’s exposure for natural-resources damages under the Oil Pollution Act of 1990, according to court filings.
OPA requires responsible parties to reimburse both federal and state governments for costs of restoring natural resources, such as wetlands, to pre-incident conditions.
Transocean said last month that the company’s liability was limited by a 2012 court ruling that it wouldn’t be liable under OPA for subsurface discharge from the well.
Federal prosecutors said in a Feb. 8 joint filing with the company that Transocean officials “provided substantial cooperation” with the government’s probe of potential criminal acts tied to the spill.
Company officials contacted a federal task force investigating the incident “within days of its formation and provided continuous and meaningful” information, Justice Department lawyers said in the filing.
Transocean “accepts responsibility for the criminal conduct” targeted by the plea, the company’s lawyers said in the same filing. The company has initiated “significant” rig safety and environmental protection programs since the Deepwater Horizon incident, the attorneys said.
The criminal case is U.S. v. Transocean Deepwater Inc., 13-cr-001, U.S. District Court, Eastern District of Louisiana (New Orleans).