BP Reaches Deal with Weatherford Over Gulf Oil Spill Costs

June 21, 2011

BP has reached agreement with Weatherford U.S., L.P. to settle potential claims between the companies related to the Deepwater Horizon accident.

Under the agreement, Weatherford, which manufactured the float collar used in the well, will pay $75 million.

BP said it will immediately apply the payment to the $20 billion trust it established to meet individual, business and government claims, as well as the cost of the natural resource damages.

BP and Weatherford have agreed to mutual releases of potential claims against each other, and BP has agreed to indemnify Weatherford for compensatory claims resulting from the accident, including claims brought relating to pollution damage stemming from the accident. BP’s indemnity excludes civil, criminal or administrative fines and penalties, claims for punitive damages, and certain other claims.

The agreement is not an admission of liability by any party regarding the accident.

Weatherford has become the second party to join BP in sharing the costs of the oil disaster. In May, Mitsui & Co. agreed to pay $1.1 billion to BP towards the clean-up bill and possibly billions more in fines.

“This settlement allows BP and Weatherford to put our legal issues behind us and move forward together in strengthening processes and procedures, safety, and best practices in offshore drilling,” said BP America Chairman and President Lamar McKay. “We are gratified that in the wake of the reports issued by the Presidential Commission and the United States Coast Guard, some of the companies involved in the Macondo well have stepped forward to recognize the findings of those investigations and help to fund the economic and environmental restoration of the Gulf.”

BP said it is working to get the other parties involved in the Macondo well to also contribute. These include Transocean, which owned and operated the Deepwater Horizon rig; Halliburton, which designed and pumped the unstable cement that the Presidential Commission found was a key cause of the accident; and Anadarko, which owned 25 percent of the project.

To date, BP has paid more than $6 billion in claims.

 

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