Transocean agrees to pay $1.4B for Gulf spill

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Transocean Deepwater Inc. agreed Thursday in federal court to plead guilty to violating the Clean Water Act and pay $1.4 billion in civil and criminal fines and penalties for its conduct in the 2010 Deepwater Horizon oil-spill disaster, which killed 11 workers and released nearly 5 billion barrels of crude oil into the Gulf of Mexico.

A criminal information was filed in U.S. District Court in the Eastern District of Louisiana along with a proposed partial civil consent decree to resolve the government’s claims against Transocean Deepwater and related entities.

The company signed a cooperation and guilty-plea agreement admitting its criminal conduct, agreeing — subject to the court’s approval — to pay $400 million in criminal fines and penalties and to continue its ongoing cooperation in the government’s criminal investigation.

In addition, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon.

“This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster,” said Attorney General Eric H. Holder Jr. “This agreement holds Transocean criminally accountable for its conduct and provides nearly $1 billion in criminal and civil penalties for the benefit of the Gulf states.”

Acting Associate Attorney General Tony West said the settlement will aid the Gulf region’s recovery from the Deepwater Horizon oil spill and requires Transocean to take important steps to help guard against such incidents happening in the future.

According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history.

In agreeing to plead guilty, Mr. Holder said Transocean admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s “well site leaders,” were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.

Under the order presented to the court, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving — in consultation with state and other resource managers — the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill.

That portion of the criminal recovery will also be directed to significant barrier-island restoration and river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $150 million will be used to fund improved oil-spill prevention and response efforts in the Gulf through research, development, education and training.

The civil settlement secures $1 billion in civil penalties for violations of the CWA, a record amount that significantly exceeds last year’s $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture.

The guilty plea agreement and criminal charge are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into the Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Lanny A. Breuer, who oversees the Justice Department’s criminal division.

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