Blow for BP on spill costs

City A.M. Reporter
BP must indemnify rig owner Transocean for some compensatory damage claims over the 2010 Gulf of Mexico oil spill, a US judge ruled last night.

BP, which has set aside $20bn to deal with claims arising from the spill but has been chasing contractors to also pay their share, lost part of its argument to expose Transocean to a bigger portion of the liabilities.

The judge agreed with Transocean that the Swiss driller was not responsible for compensatory damage claims raised by third parties for oil spilled below the ocean surface, even if the firm is found to have been negligent.

But he added that London-listed BP need not indemnify Transocean for punitive damages, or civil penalties imposed by the US government under the federal Clean Water Act.

Last night’s decision reduces the potential liability Transocean faces over the 2010 Deepwater Horizon drilling rig explosion.

But BP was upbeat in a statement after the hearing: “Today’s ruling makes clear that contractors will be held accountable for their actions under the law... As we have said from the beginning, Transocean cannot avoid its responsibility for this accident.”