The Straits Times
Published on Jan 04, 2013

Transocean to pay $1.7b for role in BP oil spill


WASHINGTON (REUTERS) - Offshore rig contractor Transocean Ltd has agreed to pay US$1.4 billion (S$1.71 billion) to settle United States (US) government charges arising from BP's massive oil spill in the Gulf of Mexico in 2010.

The settlement unveiled on Thursday by the US Department of Justice includes US$1 billion in civil penalties and US$400 million in criminal penalties. The company had set aside US$1.95 billion in potential losses related to the Macondo well disaster, including US$1.5 billion for its anticipated DoJ settlement.

Still looming is a settlement with the plaintiffs committee that represents more than 100,000 individuals and business owners claiming economic and medical damages from the spill.

UBS analyst Angie Sedita said the ultimate cost of Macondo to Transocean could end up being more than US$4 billion, including a deal with the plaintiffs that may take "years to resolve". Last year, BP reached an estimated US$7.8 billion deal to settle its liability with the plaintiffs.