Transocean in U.S. Federal Court on BP Obligations

press release
Tuesday, November 01, 2011

Transocean Files Motion for Summary Judgment in U.S. Federal Court to Compel BP to Honor Its Contractual Indemnity Obligations

 

Transocean Offshore Deepwater Drilling Inc. (TODDI), a subsidiary of Transocean Ltd., today filed a motion for summary judgment in the United States District Court for the Eastern District of Louisiana requesting the court to compel BP to honor its contractual obligation to defend, indemnify and hold harmless Transocean for damages associated with BP's failure to contain flow from its Macondo well in the Gulf of Mexico in 2010.

 

The contract between BP and Transocean for the Deepwater Horizon drilling rig contains industry-standard reciprocal indemnity provisions that apportion risk and quantify liabilities between the two companies. In the contract, which was signed in 1998 and extended several times including in 2009, BP agreed to "defend, release, protect, indemnify and hold harmless" Transocean for any and all fines, penalties and damages associated with environmental pollution originating from the well "without limit and without regard to the cause or causes" including negligence, "whether such negligence be sole, joint, active passive or gross."

 

Despite these clear and unambiguous terms, BP has refused to honor its contractual obligations to Transocean stemming from the Macondo well incident in April of 2010. In fact, contrary to its promise to "defend" and "indemnify" Transocean, BP instead filed suit against Transocean on the one-year anniversary of the incident, alleging that Transocean personnel -- including those who lost their lives in the incident -- had willful and callous disregard for the welfare of their colleagues and the environment. Transocean has honored its contractual indemnity obligations to BP nonetheless.

 

"BP's posture in this matter is not only offensive to the thousands of men and women who work together at Transocean, but it constitutes a direct threat to the sanctity of contracts and to the economic underpinnings of an industry that employs hundreds of thousands of people in the United States alone," said Nick Deeming, Senior Vice President and General Counsel of Transocean. "This motion is about more than just two companies," Deeming continued. "It is about the future of the contract drilling industry at large. If BP truly intends to make things right, it must either voluntarily or by the order of the court honor all of its contracts - not just the ones that serve its convenience or financial purposes."

 

According to the filed motion, BP has cited "ongoing investigations" and BP's own "allegations" of gross negligence on the part of Transocean as justification for BP's refusal to honor its contractual promises. The motion also asserts that after months of discovery and more than 200 witness depositions, it is clear that no evidence of gross negligence by Transocean exists. In fact, as outlined in the motion, BP oversaw, audited and commended the Deepwater Horizon rig and her crew before the incident, and every BP witness deposed as part of the litigation in New Orleans has stated under oath that the rig was fit for purpose and was operated by a safety-conscious crew.

 

Key excerpts from the brief -- which is available online at www.deepwater.com -- are as follow:

-- Transocean respectfully requests that the Court require BP to honor its contractual promises. Transocean requests that its motion for partial summary judgment be granted, specifically that:

-- The express indemnity promises made by BP in the Drilling Contract override any alleged rights of BP to contribution;

-- The indemnity provisions agreed to by BP in the Drilling Contract are valid and enforceable against the OPA statutory backdrop, including indemnity for the uncapped liability that arises upon a finding that an incident resulted from gross negligence;

-- BP's contribution claims are barred by BP's contractual promise to defend Transocean, and BP must defend Transocean against environmental wellhead pollution claims pending against it that arise from the Macondo blowout;

-- BP cannot avoid its contractual promise by alleging that Transocean breached the Drilling Contract or that the Deepwater Horizon was unseaworthy;

-- BP cannot avoid its contractual promise by alleging that Transocean or its employees were grossly negligent;

-- BP is required to honor its promise to indemnify Transocean for Clean Water Act (CWA) and any other civil penalties;

-- BP is required to honor its promise to pay the unpaid charter hire for the Deepwater Horizon;

-- As a result of BP's failure to honor its promises in each of the above areas, BP be required to reimburse Transocean its attorneys' fees, costs, and expenses incurred in defending environmental claims for which BP is contractually obligated and those incurred in forcing BP to honor its contractual promises.

To read the Deepwater Horizon contract with BP, see the company's 10-Q Quarterly Report for the Second Quarter 2010 dated August 4, 2010 or at: http://www.sec.gov/Archives/edgar/data/1451505/000145150510000069/exhibit10_1.pdf

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Diana to Acquire Two Post-Panamax Containerships

Diana Containerships Inc. announced that yesterday it signed, through two separate wholly-owned subsidiaries, two Memoranda of Agreement to purchase from an unaffiliated

Intelsat Records $598 mln Q2 Revenue

Satellite services provider Intelsat S.A. has reported total revenue of $598.1 million and net income attributable to Intelsat S.A. of $60.2 million, or $0.47 per common share on a diluted basis,

ClassNK Releases Guidelines for CNG Carriers

Classification society ClassNK has released its Guidelines for Compressed Natural Gas (CNG) Carriers.   Global economic and population growth is bringing about

Legal

Matson Settles with Hawaii Settle on Molasses Incident

Pacific cargo shipper Matson, Inc. informs that a settlement has been reached with the State of Hawaii to resolve all civil, criminal and administrative claims

Eni Mulls Mozambique LNG Supply Deal

Italian oil and gas group Eni is holding discussions with a potential buyer of liquefied natural gas (LNG) supply from its floating export project in Mozambique, an executive said on Thursday.

China, Russia in Sea of Japan Joint Military Drills

China and Russia will hold joint naval and air defence drills in the Sea of Japan, China said on Thursday, the latest exercises between the two countries which could concern Japan,

Offshore

MOL Wins Eco Awards in California

Mitsui O.S.K. Lines, Ltd. earned recognition from the ports of both Los Angeles and Long Beach, California, today, for its efforts to ensure compliance with

Mexico to Postpone Deep Water Auction

Mexico, which has started to open its nationalized oil industry to additional private investment, will postpone auctions for deep-water oil exploration and production

Oregon Bridge Danglers Hope to Delay Shell's Arctic Drilling

Protestors rappelled off a bridge in Portland, Oregon on Wednesday hoping to delay Royal Dutch Shell's Arctic oil exploration this summer by blocking the return

Energy

Asia Dry Bulk-Capesize Rates Could Soften

Capesize market "overheated" as rates near eight-month highs; optimism for a busier fourth quarter looms. Freight rates for capesize bulk carriers are likely

Eni Mulls Mozambique LNG Supply Deal

Italian oil and gas group Eni is holding discussions with a potential buyer of liquefied natural gas (LNG) supply from its floating export project in Mozambique, an executive said on Thursday.

China: U.S. "Militarizing" South China Sea

China's Defence Ministry on Thursday accused the United States of "militarising" the South China Sea by staging patrols and joint military drills there, ramping

News

Diana to Acquire Two Post-Panamax Containerships

Diana Containerships Inc. announced that yesterday it signed, through two separate wholly-owned subsidiaries, two Memoranda of Agreement to purchase from an unaffiliated

ClassNK Releases Guidelines for CNG Carriers

Classification society ClassNK has released its Guidelines for Compressed Natural Gas (CNG) Carriers.   Global economic and population growth is bringing about

Matson Settles with Hawaii Settle on Molasses Incident

Pacific cargo shipper Matson, Inc. informs that a settlement has been reached with the State of Hawaii to resolve all civil, criminal and administrative claims

 
 
Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2301 sec (4 req/sec)