Halliburton has agreed to
pay $1.1 billion to settle a substantial portion of plaintiff claims arising
from the 2010 Gulf of Mexico oil spill. Halliburton was British Petroleum’s (“BP”)
cement contractor on the drilling rig. The explosion killed 11 workers and
triggering the largest offshore oil spill in U.S. history.
The deal will settle claims
assigned to Halliburton as a result of BP's settlement in 2012 and punitive
damages from the loss of property or commercial fishing activity resulting from
the oil spill.
Earlier this month, Judge
Barbier, the US District Judge for the Eastern District of Louisiana who is
overseeing the BP lawsuits, ruled that BP’s conduct was “reckless”. This has a
huge impact on the amount of damages BP will be liable to pay, and could nearly
quadruple damages. BP already has agreed to pay billions of dollars in criminal
fines and compensation to people and businesses affected by the disaster.
Judge Barbier essentially divided blame
among the three companies involved in the spill; ruling that BP bears 67
percent of the blame; Swiss-based drilling rig owner Transocean Ltd. takes 30
percent; and Houston-based cement contractor Halliburton Energy Service takes 3
percent.
The ruling finding BP was reckless
instead of merely negligent means BP could face as much as $17.6 billion in
civil fines under the Clean Water Act. Under the Act, a polluter can be forced
to pay a maximum of either $1,100 or $4,300 per barrel of spilled oil. The
higher limit applies if the company is found grossly negligent or reckless.
However, penalties can be assessed at amounts lower than those caps.
Government experts estimated that 4.2
million barrels, or 176 million gallons, spilled into the Gulf. BP urged
Barbier to use an estimate of 2.45 million barrels, or nearly 103 million
gallons, in calculating any Clean Water Act penalties. Both sides agreed that
810,000 barrels, or 34 million gallons, of oil escaped the well but were
captured before it could pollute the Gulf.
BP has stated it will appeal the ruling.
