BP Sues Rig Owner Transocean and Maker of Blowout Preventer

By and | April 21, 2011

On the first anniversary of the Gulf of Mexico oil spill, BP Plc sued Transocean , seeking at least $40 billion in damages and other costs from the owner of the Deepwater Horizon rig.

London-based BP also sued Cameron International Corp. for negligence, saying a blowout preventer made by Cameron failed to avert the catastrophe.

Both complaints were filed Wednesday in federal court in New Orleans.

[BP also filed a lawsuit for more than $42 billion against Halliburton, which cemented the blown-out well which caused the Gulf of Mexico oil spill, after claiming a similar sum from rig owner Transocean.]

Eleven people died when the Deepwater Horizon rig exploded. About 4.9 million barrels, or more than 200 million gallons, of oil later flowed out of a subsurface BP well. BP has incurred tens of billions of dollars of liabilities from the disaster.

BP accused Transocean of negligence, saying it caused the drilling rig to be “unseaworthy.”

“The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed, resulting in the casualty,” BP said.

Transocean called the lawsuit a “desperate bid” by BP to renege on a contract to assume full responsibility for pollution and environmental costs.

“This suit is specious and unconscionable,” it said in a statement.

In a separate lawsuit, BP asked U.S. District Judge Carl Barbier, who oversees national litigation over the spill, to order Houston-based Cameron to reimburse it for “all or a part” of its damages.

“The blowout preventer failed to work and perform the function it was designed and manufactured to perform — i.e., to secure the well,” BP said. “The blowout preventer was flawed in design, and alternative designs existed that did not have these flaws.”

BP said it took a $40.9 billion pre-tax charge in 2010 related to the spill, and by year end had incurred $17.7 billion of costs.


In a statement on Wednesday, BP said it wants “to ensure that all parties involved in the Macondo well are appropriately held accountable for their roles in contributing to the Deepwater Horizon accident.”

Cameron did not address the substance of BP’s claims in an emailed statement, and said Wednesday was a deadline for companies tied to the spill to file claims against each other.

In one such case, cruise operator Carnival Corp filed claims against BP, Cameron, Transocean and several other companies connected to the well to recover damages for added fuel and vessel cleaning costs, as well as lost revenue from decreased bookings.

A Norwegian testing company concluded in a report issued March 23 that the blowout preventer’s failure was caused by a stuck section of drill pipe that blocked cutting devices from shearing and sealing the leaking well.

That finding, in a report commissioned by the U.S. Interior Department and U.S. Coast Guard, is separate from earlier conclusions by a White House commission that oil industry and regulatory missteps set into motion events that led to the biggest offshore oil spill in U.S. history.

Last June, BP created a $20 billion compensation fund for spill victims including businesses, fishermen and property owners, with incentives for people who agree not to sue the company. Kenneth Feinberg, who oversees the fund, in an interview said it is “working as intended.” [ID:nN20185485]

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

(Reporting by Jonathan Stempel in New York and Jeremy Pelofsky in Washington, D.C.; Additional reporting by Moira Herbst in New York and Kristen Hays; Editing by Steve Orlofsky, Sofina Mirza-Reid and Gary Hill)

Topics Lawsuits USA Energy Oil Gas Mexico

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