BP Sues Transocean Seeking to Recover Billions in Damages

http://www.bloomberg.com/news/2011-04-21/bp-sues-transocean-seeking-to-recove...


BP Sues Transocean Seeking to Recover Billions in Damages for Gulf Spill

By Karen Gullo, Allen Johnson Jr. and Margaret Cronin Fisk - Apr 20, 2011 8:57 PM MT

BP Plc (BP/) sued Transocean Ltd. (RIG), owner and operator of the Deepwater Horizon oil drilling rig that exploded one year ago today, blaming the company for the accident and seeking to recover costs for billions of dollars in damages related to the Gulf of Mexico oil spill.

BP said in a complaint filed today in federal court in New Orleans that it has incurred costs of $17.7 billion and that it took a pre-tax charge last year of $40.9 billion in relation to the spill. The London-based company said that without Transocean’s “misconduct,” there wouldn’t have been any explosion, fire, deaths or oil spill.

“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 in its complaint.

The Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The accident and spill led to hundreds of lawsuits against BP and its partners and contractors. BP’s filing today came as part of a series of complaints and counterclaims by plaintiffs and defendants meeting a deadline set by the federal judge overseeing the suits.

The lawsuits also name as defendants Halliburton Corp., which provided cementing services, and BP’s minority partners in the well, Anadarko Petroleum Corp. (APC) and Mitsui & Co.’s Moex Offshore LLC unit. U.S. District Judge Carl Barbier has scheduled a nonjury trial for February 2012 to determine fault.

‘Specious and Unconscionable’

BP accused Transocean, based in Vernier, Switzerland, of breaching its contractual duties, including failing to adequately maintain the Deepwater Horizon rig and fix earlier engine problems and failing to train its crew and properly coordinate efforts to fight fires on the vessel.

“This suit is specious and unconscionable,” Lou Colasuonno, a Transocean spokesman, said in an e-mailed statement. “The Deepwater Horizon was a world-class drilling rig manned by a top-flight crew that was put in jeopardy by BP, the operator of the Macondo well, through a series of cost- saving decisions that increased risk -- in some cases, severely.”

BP’s complaint was its “latest desperate bid” to turn its back on an agreement with Transocean to assume full responsibility for the costs of the spill damage, Colasuonno said.

Transocean’s Claims

Transocean today filed cross-claims against its former partners in the Macondo well project, accusing BP of failing “to honor its contractual commitments,” said Kerry Miller, a Transocean attorney. BP has failed to indemnify Transocean against lawsuits for death, personal injury and pollution, as required by its drilling contract, Miller said.

Earlier today, BP sued Cameron International Corp. (CAM) over allegations that that company’s blowout-prevention equipment was a cause “in whole or in part” of the well blowout and spill.

Cameron’s design and manufacture of the blowout preventer, or BOP, “used on the Deepwater Horizon, as well as Cameron’s maintenance and modification of that BOP, did not meet the standards of a reasonable manufacturer and service provider,” BP said in a filing. The blowout preventer “failed to properly operate when needed and was unreasonably dangerous when used as intended,” BP said.

Blowout Preventer

BP is seeking damages from Cameron for providing an allegedly defective product, as well as contributions for any money the oil company has to pay for claims under the Oil Pollution Act, the company said in the filing. BP said it has committed to paying all legitimate claims while reserving the right to collect from Cameron or other responsible parties.

Cameron said in court filings last week that the explosion wasn’t its fault because oil and gas were already surging toward the rig when workers tried to activate the blowout-prevention equipment to seal the well. “Hydrocarbons had entered the riser well before the crew attempted to activate the BOP, and even a perfectly functioning BOP could not have prevented the explosions,” Cameron said in its April 15 filing.

Plaintiffs suing the companies over the spill have claimed Houston-based Cameron’s BOP wasn’t designed to handle the extreme environment and thicker drill pipes found in ultra-deep wells. BP claims the blowout preventer was defectively designed and incapable of working as expected.

“Today is the deadline under the relevant statue for all parties to file claims against each other,” Rhonda Barnat, a Cameron spokeswoman, said in an e-mail. “It is not surprising that the companies are filing to protect their indemnity rights.”

Cameron has also filed claims “in order to protect ourselves,” she said.

The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net; Allen Johnson Jr. in New Orleans at allenmct@gmail.com; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net Tweet