Transocean: Agreement Reached on Deepwater Horizon Claims

Press Release
Thursday, January 03, 2013

Transocean Ltd. (NYSE: RIG) (SIX: RIGN) announced that it has reached an agreement with the U.S. Department of Justice to resolve certain outstanding civil and potential criminal claims against the company arising from the April 20, 2010, accident involving the Deepwater Horizon in the Gulf of Mexico.


As part of this resolution, a Transocean subsidiary has agreed to plead guilty to one misdemeanor violation of the Clean Water Act (CWA) for negligent discharge of oil into the Gulf of Mexico and pay $1.4 billion in fines, recoveries and penalties, excluding interest.  This resolution will result in the Department of Justice concluding its criminal investigation of Transocean and settling its claims for civil penalties against the company relating to the spill from BP's Macondo well.  The company intends to satisfy its payment obligations over a period of five years, using cash on hand and cash flow from operations.  At September 30, 2012, Transocean had accrued an estimated loss contingency of $1.5 billion associated with claims made by the Department of Justice.

Terms of the Agreement

A Transocean subsidiary has agreed to plead guilty to a single misdemeanor violation of the CWA for negligent discharge of oil into the Gulf of Mexico.  This violation pertains to well monitoring in connection with specific operations during the temporary abandonment procedure on April 20, 2010.  Pursuant to the agreement, Transocean will pay a fine in the amount of $100 million within 60 days of this agreement receiving U.S. federal court approval.  The Transocean subsidiary will also be subject to a statutory-maximum term of five years of probation.

Additionally, Transocean will pay $150 million to the National Academy of Sciences (NAS) over a five-year period, and $150 million to the National Fish and Wildlife Foundation (NFWF) over a three-year period.  The funds paid to the NAS will be for the purposes of oil spill prevention and response in the Gulf of Mexico; funds paid to the NFWF will be directed to natural resource restoration projects and coastal habitat restoration, including restoration of the barrier islands off the coast of Louisiana and diversion projects on the Mississippi and Atchafalaya Rivers.

To address the government's pending civil claims, Transocean has agreed to pay $1 billion in CWA civil penalties over a period of three years.  Additionally, the company has agreed to implement certain measures to prevent a recurrence of an uncontrolled discharge of hydrocarbons.  Transocean has agreed to consult with the United States in preparing a performance plan for these improvement measures, which must be submitted for the government's approval within 120 days of this agreement taking effect.

Any potential claims associated with the Natural Resources Damage Assessment (NRDA) process are excluded from the agreement with the Department of Justice. However, the district court previously held that Transocean is not liable under the Oil Pollution Act for damages caused by subsurface discharge from the Macondo well.  Assuming that this ruling is upheld on appeal, Transocean's NRDA liability would be limited to any such damages arising from the above-surface discharge. 

The Department of Justice has agreed that it will not pursue further prosecution of Transocean Ltd. and certain of its subsidiaries for any conduct regarding any matters under investigation by the Deepwater Horizon Task Force relating to or arising out of the Macondo well blowout, explosion, spill or response.  Transocean has agreed to continue to operate with the Deepwater Horizon Task Force in any ongoing investigation related to or arising from the accident.  The civil and criminal agreements are subject to court approval and, in the case of the civil agreement, public notice and comment.

Timing of Payments

Pursuant to the agreements, Transocean will pay fines, penalties and recoveries totaling $1.4 billion over a five-year period according to the following schedule:

2013 - payments totaling $560 million
2014 - payments totaling $460 million
2015 - payments totaling $260 million
2016 - payments totaling $60 million
2017 - payments totaling $60 million
 

In addition, civil penalties will bear interest from the date that the consent decree is lodged with the court.  Neither settlement payments nor accrued interest are deductible for tax purposes.
 


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

People & Company News

DNV-GL Approves Kongsberg Engine Room Simulators

Kongsberg Maritime has received DNV-GL certification for three of its latest engine room simulator models designed to provide in-depth training on the K-Sim Engine simulator platform.

Container Shipping Lucky to Break Even in 2015

A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according

CMA CGM's OPDR Acquisition Approved by EU

The CMA CGM Group announced that the European Commission has approved its acquisition of OPDR. In order to finalize the acquisition, which was announced on November 25, 2014 by Jacques R.

Legal

Migrant Sailboat Sinks in Aegean, 17 Missing

A sailboat carrying migrants sank in in the Aegean sea between Turkey and Greece on Tuesday and at least 17 people were missing, Greek authorities said. Greece's

APL’s Schedule Reliability Scales Up

APL was the most reliable carrier with a global on-time performance of 85.5% in May 2015, according to the latest Global Liner Performance Report by SeaIntel Maritime Analysis.

Gazprom, Gasunie Sign Framework Agreement - LNG

At a Meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Han Fennema, CEO and Chairman of the Executive Board of Gasunie a Framework

Offshore

Research Vessel Concept a First for Voith

The new fisheries research vessel of the Shanghai Ocean University will be a first for Voith in several respects.   It is the first fisheries research vessel

Ocean Safety’s New Liferaft Facility Opens

Ocean Safety, a specialist in the worldwide supply, distribution, service and hire of marine safety equipment, has opened a new liferaft hire division.   Ocean

ISS Inks Service Pact with Technip

Inchcape Shipping Services (ISS) and Techniphave signed a contract to provide marine agency services and logistics for the Rashid C project in the Middle East. Currently

Salvage

Four Rescued From Burning Boat in Lake Michigan

The Coast Guard and a good Samaritan rescued 4 people after their 20-foot boat caught fire on the Grand River, Sunday. A boat crew from Coast Guard Station

Egyptian Vessel Sinks

Taba, an Egyptian ferry, carrying passengers, cargo and trucks, sank in the Red Sea early on Sunday, according to state-owned news agency MENA.   The 6,600-gt

Passenger Ferry Capsizes in the Philippines, Nearly 40 Dead

MBCA Kim Nirvana, a passenger boat carrying 189 people has capsized in the central Philippines, minutes after leaving port, the Philippine Red Cross and coast guard spokesman Cmdr.

Casualties

As First Victims Mourned, Italian Navy Searches On

Italy held a funeral service on Tuesday for 13 migrants who died in the worst shipwreck in the Mediterranean in recent history, while the navy continued its search for other victims of the disaster.

Migrant Sailboat Sinks in Aegean, 17 Missing

A sailboat carrying migrants sank in in the Aegean sea between Turkey and Greece on Tuesday and at least 17 people were missing, Greek authorities said. Greece's

Four Rescued From Burning Boat in Lake Michigan

The Coast Guard and a good Samaritan rescued 4 people after their 20-foot boat caught fire on the Grand River, Sunday. A boat crew from Coast Guard Station

News

KR Overhauls Hull Structure Software

IACS member classification society the Korean Register (KR) informs it has overhauled its SeaTrust-HullScan software package, a ship design support solution that analyzes and appraises a vessel’s.

Cruise Ship Passenger Medevaced off US

A cruise ship passenger suffering stroke symptoms was medevaced by U.S. Coast Guard personnel approximately 200 miles east of Wilmington, North Carolina. The

Wärtsilä Propulsion for New Fishing Vessel

A new fishing vessel being built by Simek AS in Norway on behalf of the U.K. operator Antares (Whalsay) Fishing Company Ltd, will feature an integrated Wärtsilä

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Pipelines Pod Propulsion 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: 0.2621 sec (4 req/sec)