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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Seaspan Responds to Canada’s NSS Announcement

In response to the Government of Canada’s announcement of a series of enhancements to strengthen the National Shipbuilding Strategy, Seaspan Shipyards’ president

DONG Energy Listing to Value Group at up to $16 Bln

DONG Energy's has set a potential $16 billion price tag on its stock market debut, giving investors a chance to buy into the growth in offshore wind power, but

New Leadership at Alphatron Marine

Alphatron Marine announced that Arno Metzemakers will join the company's management team as General Manager responsible for all operational matters worldwide, effective June 1.

Legal

Fos Tanker Queue Grows as Strike Impacts Refinery Ops

Nearly two dozen vessels were queued outside the French oil import terminal in Fos, southern France on Thursday, held up by a strike organised by the hardline CGT

Aquino: China Breaks South China Sea Deal

Philippine President Benigno Aquino on Thursday accused China of breaking a U.S.-brokered deal between the two nations on the Scarborough Shoal, an uninhabited rocky outcrop in the South China Sea.

2016 SDAP Rates Announced

The US Navy released updates to the Special Duty Assignment Pay (SDAP) for eligible enlisted Sailors in NAVADMIN 120/16, May 25. The SDAP program enhances the Navy's ability to size,

Offshore

DONG Energy Listing to Value Group at up to $16 Bln

DONG Energy's has set a potential $16 billion price tag on its stock market debut, giving investors a chance to buy into the growth in offshore wind power, but

Østensjø Rederi Orders Another Wind Farm Vessel

Rolls-Royce has signed a contract with shipyard Astilleros Gondan in Spain to design and equip a second Service Operation Vessel for ship owner Østensjø Rederi.

Prosafe Appoints Interim Chairman of the Board

Prosafe, owner and operator of semi-submersible accommodation vessels, informs that its Chairman, Harald Espedal, has notified the company that he will step down

Salvage

Returning to the Scene of the Shipwrecks

A participant in a diving field school last fall, graduate student Tori Kiefer is back to help a new set of students learn the joy of surveying shipwrecks.   Last fall,

Grounded Bulker Repaired, Heads for Japan

The Captain of the Port for Oregon and southern Washington canceled the captain of the port order on the motor vessel Sparna allowing the vessel to leave its mooring at Kalama, Wash.

Ardent Earns ISO 9001:2015 Certification

Ardent, formed just over a year ago as a merger of A.P. Moller-Maersk’s Svitzer Salvage and Crowley’s Titan Salvage, has been issued the ISO 9001:2015 Certification

Casualties

Migrant Boat Capsizes, Second in Two Days

A migrant boat capsized in the Mediterranean on Thursday and about 100 of its passengers have been rescued while the number of dead is unknown, officials said.   It

Overcrowded Migrant Boat Flips, Five Dead

A large wooden fishing boat overcrowded with migrants capsized off the coast of Libya, the Italian navy said on Wednesday, with some 562 people rescued and five found dead.

Grounded Bulker Repaired, Heads for Japan

The Captain of the Port for Oregon and southern Washington canceled the captain of the port order on the motor vessel Sparna allowing the vessel to leave its mooring at Kalama, Wash.

News

Seaspan Responds to Canada’s NSS Announcement

In response to the Government of Canada’s announcement of a series of enhancements to strengthen the National Shipbuilding Strategy, Seaspan Shipyards’ president

DONG Energy Listing to Value Group at up to $16 Bln

DONG Energy's has set a potential $16 billion price tag on its stock market debut, giving investors a chance to buy into the growth in offshore wind power, but

Saint Lucia Accedes to Four IMO Treaties

Saint Lucia has acceded to four International Maritime Organization (IMO) treaties, including conventions covering ballast water management (BWM Convention) and

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Navigation Offshore Oil 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: 0.2610 sec (4 req/sec)