Deepwater Horizon owner settles for $1.4b

NEW YORK — Transocean, whose floating Deepwater Horizon oil rig blew out in 2010 to cause the biggest US oil spill, has agreed to settle all civil and criminal claims with the federal government for $1.4 billion.

The Deepwater Horizon exploded, burned, and sank in April 2010. Eleven men were killed, and millions of gallons of oil flowed into the Gulf of Mexico and fouled the shores of coastal states. The Macondo well was owned by the British oil giant BP, which settled its own criminal charges and some of its civil charges in November for $4.5 billion.

While this settlement resolves the government’s claims against Transocean, that company and the others still face a multistate civil case scheduled to begin in February in New Orleans. Under a deal filed in federal court, Transocean Deepwater agreed to one criminal misdemeanor violation of the Clean Water Act and will pay a fine of $100 million. Over the next five years, the company will pay record civil penalties of $1 billion under the act.


Transocean also agreed to pay the National Academy of Sciences and National Fish and Wildlife Foundation $150 million each. Those funds will be applied to oil spill prevention and response in the Gulf of Mexico and natural resource restoration projects.

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The agreement is subject to public comment and court approval. The company agreed to five years of monitoring of its drilling practices and improved safety measures.

Transocean Ltd., the Switzerland-based parent of the rig owner, said the company thought these were ‘‘important agreements’’ and called them a ‘‘positive step forward.’’

The company announced in September that it had set an ‘‘estimated loss contingency’’ of $1.5 billion against the Justice Department’s claims.

Shares of Transocean Ltd. rose nearly 3 percent on the news, to close at $49.20.


In a statement, Lanny A. Breuer, assistant attorney general for the Justice Department’s Criminal Division, seemed to suggest Transocean played a subservient and lesser role in the disaster to that of BP.

‘‘Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them,’’ he said. Breuer added that the $1.4 billion ‘‘appropriately reflects its role.”

Under a law passed last year, 80 percent of the penalty will be applied to projects for restoring the environment and economies of Gulf states. That fact was applauded by a coalition of Gulf Coast restoration groups, including the Environmental Defense Fund and the National Audubon Society. A statement called this ‘‘a great day for the Gulf environment and the communities that rely on a healthy ecosystem for their livelihoods.’’

Still, the penalty struck some as light. David Uhlmann, who headed the Justice Department environmental crimes section from 2000 to 2007, praised the civil settlement, which ‘‘reflects the scope of the Gulf oil spill tragedy.’’

He argued, however, that the criminal penalty should have been at least as onerous, ‘‘given Transocean’s numerous failures to drill in a safe manner, which cost 11 workers their lives and billions of dollars in damages to communities along the Gulf.’’


The settlement, he said, should have included seaman’s manslaughter charges, which were part of the BP settlement.

As for the company’s role in following the lead of BP, he said, ‘‘following orders is not a defense to criminal charges.’’

At the Environmental Protection Agency, Cynthia Giles, assistant administrator, called the settlement ‘‘an important step’’ to hold Transocean and others accountable. “EPA will continue to work with DOJ and its federal partners to vigorously pursue the government’s claims against all responsible parties and ensure that we are taking every possible step to restore and protect the Gulf Coast ecosystem,’’ she said.

The multistate trial over claims in the Deepwater Horizon cases that have not been settled are scheduled to begin in February. Lawyers who represent the steering committee of plaintiffs in the cases said Thursday’s settlement did not change the case, and that BP and Transocean will be found grossly negligent at trial.