Rig contractor Transocean Ltd agreed Thursday to pay $1.4 billion to settle charges over BP Plc's Gulf of Mexico oil spill, admitting that its crew on the Deepwater Horizon was partly responsible.
Transocean, which employed nine of the 11 workers killed in the April 2010 accident, had set aside $1.5 billion for the U.S. Department of Justice out of a $1.95 billion Macondo loss provision. The settlement, unveiled Thursday by the department, includes $1 billion in civil penalties and $400 million in criminal penalties, Reuters reports.
Still looming is a settlement with the plaintiffs' committee that represents more than 100,000 individuals and business owners claiming economic and medical damages. So the ultimate cost of Macondo to Transocean could end up being more than $4 billion, UBS analyst Angie Sedita told Reuters. Last year, BP reached a $7.8 billion plaintiffs' liability settlement.
Shares of Switzerland-based Transocean rose 6.4 percent to close at $49.21 in New York on the lower-than-expected payout, with Barclays having expected a settlement of $2.5 billion. The cost of insuring Transocean debt fell sharply.
BP and its contractors have sought to push blame on to each other since the Macondo explosion caused the largest-ever U.S. offshore oil spill. Lawyers and analysts see the federal settlements with BP, and now Transocean, as a framework to start putting the disaster behind them.
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Halliburton Co., which performed cementing work on the Macondo well, remains the only company involved in the spill not to have settled. Daniel Becnel, a Louisiana lawyer representing spill-related claimants, believes that a settlement with Halliburton is merely a matter of time, as the company likely would not like to engagte in a protracted court battle.