According to reports, BP has begun the New Year by implementing a new legal tactic in its fight to force contractor Halliburton to shoulder some of the costs and expenses associated with the 2010 Gulf Coast oil spill. Sources estimate the total cost of the disaster to be in the neighborhood of $42 billion. Reportedly, Halliburton, the company that cemented the doomed well, asked a court to force BP to recognize a contractual agreement that protected Halliburton against possible spill clean-up costs.
However, in response, BP has recently asked the court not to give a summary judgment on that request, which is one that would result in ruling without a full trial being held and relieve Halliburton from being responsible for a portion of the total spill costs. Sources say BP reiterated a previous claim that Halliburton should pay it damages “equal to, or in the alternative proportional to Halliburton’s fault,” to cover cleanup costs and government fines BP might faces.
Reportedly, BP shares traded up 2.2 percent at 1520 GMT, ahead of a 1.5 percent rise in the STOXX Europe 600 Oil and Gas index. Sources say these developments come ahead of hearings on a collection of lawsuits, which are set to begin in New Orleans on February 27, 2011. Legal sources say the ‘multi-district litigation’ is expected to decide who will compensate those hurt by the spill, the extent of government fines and who will be remembered as the negligent party.
Sources say that BP is ready to settle with its contractors, the parties who have suffered property and other damage, and the government, but not at any cost. According to sources familiar with BP, the company expects that if it does manage to settle the cases, it will represent one of the largest legal settlements in U.S. corporate history. The Deepwater Horizon rig explosion in April 2010, which killed 11 workers and spewed more than 4 million barrels of oil into the Gulf, has sparked a slew of lawsuits and federal citations against the companies involved.
Sources say BP has been paying the costs of the response effort alone, but it has now cut deals with its two partners in the doomed Macondo well, Anadarko and Mitsui. Reportedly, the two companies at first refuted their responsibility to contribute to oil spill bill, citing BP’s negligence. Sources say that last month, Cameron International Corp, which made the blowout preventer that failed to seal off the blown-out well, agreed a $250 million settlement with BP to help pay for costs associated with the spill. Further, sources say settlement agreements with two remaining parties, Halliburton and Transocean, have to date proved elusive.
Reportedly, Transocean, the owner and operator of the Deepwater Horizon rig, and Halliburton, which supplied cement to cap the well, are both being sued by BP to share the cost of the spill and cleanup, while the two have launched lawsuits of their own.
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