Transocean Agrees to Pay $1.4 Billion for Role in BP Oil Spill

The details of the Deepwater Horizon oil spill back in 2010 are well known around the world, as is that fact that cases are still being fought to determine liability and the size of damages that can be brought against the guilty parties.

Transocean Deepwater was the operator of the Deepwater Horizon rig, and therefore played a part in the devastating spill, which caused millions of gallons of oil to spill into the sea, and the deaths of 11 men.

The Justice Department announced yesterday that Transocean (NYSE:RIG) will pay $1.4 billion to settle civil and criminal charges. $100 million will be paid in relation to a misdemeanour violation or the Clean Water Act, and another $150 million will be paid to each of the National Academy of Sciences and the National Fish and Wildlife Foundation. Back in September Transocean stated that they had set aside $1.5 billion as an estimated loss contingency, so this fine of $1.4 billion will not hurt them too much.

Related Article: Top Ten Costs of the BP Oil Spill that won't be Covered by the $4.5 Billion Fine

Lanny A. Breuer, assistant attorney general for the Justice Department’s Criminal Division, explained that Transocean had played a lesser role in the disaster, hence its much smaller fine compared to BP (NYSE: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 that the $1.4 billion “appropriately reflects its role in the Deepwater Horizon disaster.”

But not all are happy with this justification of such a small charged being levied against Transocean. David M. Uhlmann, head of the Justice Department’s environmental crimes section from 2000 to 2007, believes that the charges should have also included manslaughter charges for the deaths of the 11 crewmen, just as BP had to face. He also believes that the overall fine should have been more, stating that “following orders is not a defence to criminal charges.”

By. James Burgess of Oilprice.com