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Human rights impacts of oil pollution: US Gulf Coast

Lawsuits, regulatory & legislative action following explosion & spill - Lawsuits between companies 

This section includes information about lawsuits between BP and its minority business partners Anadarko Petroleum and MOEX Offshore (part of Mitsui Oil Exploration), the rig owner Transocean, the maker of the “blowout preventer” Cameron International, and Halliburton which had performed work on the well just before the explosion.

Italicised quotations below are selected abstracts; for full text, click hyperlinked titles.

"BP sues Halliburton for Deepwater Horizon oil spill clean-up costs", Dominic Rushe, Guardian [UK], 3 Jan 2012
"BP has handed the bill for clearing up the disastrous 2010 Deepwater Horizon oil spill to Halliburton, the US contractor it claims botched the cement work on the failed rig. The oil group has filed a suit in New Orleans seeking 'the amount of costs and expenses incurred by BP to clean up and remediate the oil spill, the lost profits from and/or diminution in value of the Macondo prospect, and all other costs and damages incurred by BP related to the Deepwater Horizon incident and resulting oil spill', according to the filing.BP did not specify the amount of damages it is seeking from Halliburton, which provided cement contracting services on the well in the Gulf of Mexico. But it previously estimated the clean-up will cost $42bn (£27bn). The oil firm wants Halliburton to pay damages 'equal to, or in the alternative proportional to Halliburton's fault,' to cover clean-up costs and any government fines BP may face. A Halliburton spokeswoman said: 'Halliburton stands firm that we are indemnified by BP against losses resulting from the Macondo incident.'"

"Cameron Loses Appeal to Scuttle BP Gulf Spill Trial Plan", Margaret Cronin Fisk, Bloomberg, 27 Dec 2011
"Cameron International...lost its appeal to derail the February nonjury trial over which companies should be blamed for the 2010 BP...oil spill in the Gulf of Mexico. A panel of the U.S. Court of Appeals for the 5th Circuit rejected Cameron’s claim that U.S. District Judge Carl Barbier wrongly cited maritime law to allow him to conduct a nonjury trial over liability for the incident. Cameron contended that claims against the company fall under the federal Outer Continental Shelf Lands Act, which allows for a jury trial. 'The district court did not clearly err in concluding that the limitation proceeding is within the court’s admiralty jurisdiction,' the three-judge panel said in a one-paragraph decision...The court rejected review of other issues raised by Cameron. Cameron asked the appeals court to throw out the existing trial plan and rule that the company has a right to a trial before a jury. Yesterday’s ruling removes a possible obstacle to the nonjury trial before Barbier that is scheduled to begin Feb. 27 in New Orleans to determine liability and apportion fault...Cameron...said the trial plan violates its constitutional rights."

"Transocean Says It Doesn’t Owe Fines for Below-Surface Spill", Margaret Cronin Fisk, Laurel Brubaker Calkins, Bloomberg, 12 Dec 2011
"Transocean...said it can’t be forced to pay federal fines or penalties for oil spilled below the surface of the Gulf of Mexico in the Deepwater Horizon incident because of an indemnity contract with BP...Transocean asked a federal judge in New Orleans to find that the indemnity provision in the drilling contract requires BP to pay virtually all damages and cleanup costs. BP has argued that Transocean’s conduct voided the agreement. The indemnity provision doesn’t cover liabilities that resulted from willful misconduct, the U.S. Justice Department said...asking the court to delay ruling on the indemnity provision. Transocean isn’t asking to be held harmless for such misconduct, the company said in a court filing today...'The drilling contract does not provide for indemnity in the event of intentional or willful misconduct in excess of gross negligence,' Transocean’s lawyers said. The company’s claim for indemnity for Clean Water Act fines 'arises only if Transocean is held liable' for 'underwater discharge from the well,' the company said."

"Halliburton Responds to BP Motion for Sanctions", Halliburton in Business Wire, 7 Dec 2011
"Halliburton...responded...to court filings by BP saying: BP recently filed a motion for sanctions against Halliburton alleging that Halliburton destroyed evidence relating to post-incident testing of the foam cement slurry. BP has been aware of post-incident tests for some time, but has chosen this late date in the litigation to mischaracterize the results of such tests. Contrary to BP’s assertions, the post-incident testing referred to in its motion was not conducted on rig samples or in a manner approved by Halliburton. Rather, the informal testing BP refers to used off-the-shelf materials that yielded results which Halliburton believes have little or no relevance to the case, particularly when pre-incident testing using rig samples and formal lab processes showed that the cement slurry was designed to be stable. In September 2011, the U.S. Department of Interior reported testing done on the actual Deepwater Horizon rig sample, confirming Halliburton's position that the slurry was designed to be stable. The Department further concluded that the cement likely did not fail in the annulus part of the well."

"BP says Halliburton destroyed well data", Jennifer A.Dlouchy, Houston Chronicle, 5 Dec 2011
"BP...accused Halliburton of destroying test results showing that the oil field services company used unstable cement to secure the Macondo well that blew out in the Gulf of Mexico last year. BP made the allegations in a 310-page legal filing at the U.S. District Court in New Orleans that is overseeing a class action lawsuit tied to the 2010 oil spill. BP accused Halliburton of 'steadfastly' refusing to turn over its internal results from testing on the cement mix and subsequently destroying the data from those examinations. 'Halliburton intentionally destroyed the evidence related to its non-privileged cement testing, in part because it wanted to eliminate any risk that this evidence would be used against it at trial,' BP said in its filing. In response, Halliburton spokeswoman Beverly Stafford said...that the company is reviewing details of BP's filing, but that 'we believe that the conclusion that BP is asking the court to draw is without merit and we look forward to contesting their motion in court.'"

"BP agrees $4bn Anadarko settlement", Michael Stothard, Financial Times, 17 Oct 2011
"Anadarko...the part-owner of the oil well at the centre of the Gulf of Mexico spill, has agreed to pay BP $4bn to settle all claims relating to the accident last year, which led to the death of 11 workers...The out of court settlement marks the end of a long-running dispute between the companies over responsibility for the blow-out at the Macondo well. As part of the settlement, US-based Anadarko will drop its allegations of gross negligence against BP...Earlier this year, BP announced a $1bn settlement with Moex Offshore, a subsidiary of Japan’s Mitsui...'This settlement represents a positive resolution of a significant uncertainty and it resolves the issues among all the leaseholders of the Macondo well,' said Bob Dudley, BP chief executive...'This settlement agreement with BP is the right action for our stakeholders, as it removes significant uncertainty regarding future liabilities and associated risks,' said Jim Hackett, Anadarko chief executive."

"Halliburton Sues BP Over Deepwater Crisis", Michael Kunzelman, Associated Press, 2 Sep 2011
"BP...has engaged in a 'cover up scheme' to hide its culpability for the deadly rig explosion that spawned last year's massive oil spill in the Gulf of Mexico, one of the oil giant's partners in the drilling project claims in a newly filed lawsuit. Halliburton['s]...suit...accuses BP of concealing critical information about the deepwater well that blew out on April 20, 2010...In response to the suit, which seeks unspecified monetary damages, BP spokesman Scott Dean accused Halliburton of trying to deflect blame and divert attention from its role in the disaster. Dean said 'multiple independent investigations' have identified 'serious problems' with the cementing of the well."

"BP Well Partner Must Take Claims to Arbitration, Judge Rules", Allen Johnson Jr., Margaret Cronin Fisk, Bloomberg, 15 Jul 2011
"BP...can halt litigation with minority business partner Anadarko Petroleum...so the companies can arbitrate liability over costs of last year’s oil- well blowout in the Gulf of Mexico, a judge said. Anadarko sued BP, asking a federal judge in New Orleans to declare it isn’t responsible for damages and cleanup costs created by the worst offshore oil spill in U.S. history...Anadarko, which owned 25 percent of the Macondo well, said BP’s conduct caused the blowout and the spill. BP asked U.S. District Judge Carl Barbier to stall the lawsuit, contending that a partnership agreement required the companies to first attempt arbitration to resolve disputes. Barbier...sent the claim to arbitration. 'Anadarko has not met its burden to overcome the presumption in favor of arbitration,' Barbier said in his ruling. 'Accordingly, Anadarko’s claim against BP must be stayed pursuant to the arbitration clause' in the joint operating agreement between the parties, he said. Today’s decision 'does nothing to diminish our claims,' John Christiansen, Anadarko’s spokesman, said...'It simply addresses the venue in which they may be resolved.'...'Anadarko has blatantly disregarded its responsibilities to the residents of the Gulf Coast by failing to pay its fair share of the costs relating to the accident and resulting spill,' [Scott] Dean [a spokesman for London-based BP] said."

"BP agrees to $1 billion settlement with Moex", Associated Press, 20 May 2011
"BP...said...that MOEX Offshore...which had a 10 percent interest in the Macondo well, has agreed to pay $1.065 billion to settle all claims between the companies over the accident on the Deepwater Horizon rig...Under the settlement, MOEX...agreed to recognize findings by the U.S. Presidential Commission that the accident "was the result of a number of separate risk factors, oversights and outright mistakes by multiple parties and a number of causes. It also recognized findings from the U.S. Coast Guard that 'the safety management systems of both Transocean and its Deepwater Horizon rig had significant deficiencies that rendered them ineffective in preventing the accident.'...'It is the first time that a company involved in the well has joined BP in helping to meet the cost of the accident and it appears to reinforce the likelihood that BP will not be found grossly negligent, an outcome that would bring a much larger liability under the Clean Water Act,' Jackson [head of equities at Killik & Co] said. He added that BP might reach a global settlement that rolls up into a single deal the liability for fines, damages and other penalties. BP said...it would continue to pursue...Anadarko, which had a 25 percent interest in the well...Transocean and cement contractor Halliburton to pay their share of billions of dollars in cleanup costs, oil-spill damages and pollution fines."

"BP sues Halliburton, Transocean over oil spill and blast", International Business Times, 21 Apr 2011
"BP and its partners involved in the Gulf of Mexico oil spill have unleashed a $100 billion-plus barrage of legal claims a year after the rig blast killed 11 workers and created an environmental disaster. On the anniversary of the disaster, BP filed suits totaling more than $80 billion against Transocean and Halliburton. And in a separate action...BP sued Cameron International...the maker of the blowout preventer, the so-called fail-safe device that failed to automatically shut down the well. BP is seeking up to the full cost of the disaster - estimated at $42 billion - plus costs, interest and punitive damages from each of the companies which helped it drill the doomed well....BP's partners in the well, Anadarko and Mitsui filed a lawsuit against it, challenging BP's demands that they contribute to the cost of the clean-up effort. Wednesday was the deadline - one year after the disaster - for companies connected to the spill to file claims against each other. Analysts said the companies probably did not want the cases to ever get to court, as this would lead to a spectacle which would only further damage their already battered images. Instead, the suits were seen as tactical moves ahead of settlements that could see some of the burden shared...'It's got a fairly low chance of being successful,' said one analyst who declined to be named because of the legal sensitivities around the case. 'I get the feeling that there is positioning going on here for a settlement.'So far, BP has met the full cost of the clean up effort alone and is paying compensatory damages to affected people in the Gulf."

"Oil spill: BP to sue partner in Gulf oil well", Rowena Mason, Damian Reece, Telegraph [UK], 19 Jun 2011
"BP is preparing to sue its main partner in the leaking Gulf of Mexico oil field for its share of clean-up costs after the company, Anadarko, said BP's behaviour revealed 'gross negligence' and that the ­accident was preventable. In a fundamental split between the two companies with lead responsibility for the well, a senior BP source...[said] that Anadarko was 'shirking its responsibilities', not accepting its liabilities and that legal action in the US was now likely to follow...BP has already sent the company one demand for payment but, the BP source said, had yet to receive any costs for the multi-billion ­dollar clean-up operation...Mitsui, the 10pc owner of the well, has made no decision on whether to admit liability for its share of costs, but is likely to join Anadarko in its refusal to contribute. BP could then also take legal action against that company as well. The deepening row over costs followed a call from US Congressman Edward Markey, saying Anadarko and Mitsui should be held accountable and set aside money to pay a share of claims tied to the spill. 'They cannot escape responsibility,' he said...A BP spokesman said the company strongly disagreed with Anadarko's claims.'These allegations will neither distract the company's focus on stopping the leak nor alter our commitment to restore the Gulf coast,' said BP's chief executive officer, Tony Hayward.'Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations.'"

"Anadarko considers suing BP over ‘reckless’ actions", Sheila McNulty, Financial Times, 19 Jun 2011
"Anadarko Petroleum, which owns 25 per cent of the ruptured oil well in the Gulf of Mexico, on Friday accused BP of 'reckless decisions and actions' and indicated it might sue for actions that it said 'likely represent gross negligence or wilful misconduct'. Anadarko is responsible for 25 per cent of the clean-up costs. Yet while those costs are more easily absorbed by BP, which had revenues of $239bn last year, they could be significant for Anadarko, with revenues of $9bn...'The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions,' said Jim Hackett, Anadarko’s chief executive. BP said it 'strongly disagrees' with Anadarko’s statement...Anadarko has signaled several times that it may take action to limit its liabilities and did so again. Mr Hackett noted that, under the terms of the joint operating agreement, BP, as operator, owed duties to its co-owners, including Anadarko, to perform the drilling in a 'good and workmanlike manner and to comply with all applicable laws and regulations.'...The agreement also provides that BP is responsible to its co-owners for damages caused by its gross negligence or willful misconduct, Anadarko said...The information 'indicates BP operates unsafely and failed to monitor and react to several critical warning signs during the drilling of the Macondo well,' Anadarko said."

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Related stories and components

3 January 2012

BP sues Halliburton for Deepwater Horizon oil spill clean-up costs [USA]

Author: Dominic Rushe, Guardian [UK]

BP has handed the bill for clearing up the disastrous 2010 Deepwater Horizon oil spill to Halliburton, the US contractor it claims botched the cement work on the failed rig. The oil group has filed a suit in New Orleans seeking "the amount of costs...

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27 December 2011

Cameron Loses Appeal to Scuttle BP Gulf Spill Trial Plan [USA]

Author: Margaret Cronin Fisk, Bloomberg

Cameron International...lost its appeal to derail the February nonjury trial over which companies should be blamed for the 2010 BP...oil spill in the Gulf of Mexico. A panel of the U.S. Court of Appeals for the 5th Circuit rejected Cameron’s claim...

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