BP sues Transocean over Gulf oil spill

One year on, the ecosystem continues to feel the effects of the Gulf of Mexico oil spill [GALLO/GETTY]

On the first anniversary of the Gulf of Mexico oil spill, BP has sued Transocean, the owner of the Deepwater Horizon rig which exploded on April 20, 2010, for at least $40 billion in damages and other costs.

The London-based oil company has also sued Cameron International Corp, the manufacturer of a blowout preventer, for negligence on the basis of the product failing to avert the catastrophe.

Both complaints were filed on Wednesday in a federal court in New Orleans, Louisiana, and the Associated Press reported that the company had also filed a suit against cement contractor Halliburton, alleging fraud, negligence and concealing material facts in connection with its work on the rig.

Eleven people died when the Deepwater Horizon rig exploded on April 20 last year. About 4.9 million barrels, or more than 200 million gallons, of oil later flowed out of the subsurface well. BP has incurred tens of billions of dollars in liabilities from the disaster.

Meanwhile, relatives of the 11 people who were killed in the accident flew over the Gulf of Mexico on Wednesday to mark the anniversary of the spill, while residents of New Orleans gathered in a prayer vigil onshore.

Barack Obama, the US president, paid tribute in a statement to those killed in the blast. He said that while significant progress had been made in mitigating the worst effects of the oil spill, “the job isn’t done”.

“We continue to hold BP and other responsible parties fully accountable for the damage they’ve done and the painful losses that they’ve caused,” he said.

‘Unseaworthy rig’

BP now alleges that Transocean was guilty of negligence, causing the drilling rig to be “unseaworthy”.

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“The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed, resulting in the casualty,” BP said.

For its part, Transocean has termed the lawsuit a “desperate bid” by BP to pull back from its contractual obligation to assume full responsibility for all pollution and environmental costs incurred in the operation of the rig.

“This suit is specious and unconscionable,” it said in a statement.

“The Deepwater Horizon was a world-class drilling rig manned by a top-flight crew that was put in jeopardy by BP, the operator of the Macondo well, through a series of cost-saving decisions that increased risk – in some cases, severely,” Transocean said.

In a separate lawsuit, BP asked US District Judge Carl Barbier, who oversees all national litigation related to the Gulf of Mexico oil spill, to order Cameron International, a Houston-based company, to reimburse it for “all or a part” of its damages.

“The blowout preventer failed to work and perform the function it was designed and manufactured to perform – i.e. to secure the well,” BP said.

“The blowout preventer was flawed in design, and alternative designs existed that did not have these flaws.”

BP said in the suit that it had assumed a $40.9 billion pre-tax charge in 2010 for the spill, and by the end of the year it had incurred $17.7 billion in costs.

Law suit deadline

The oil giant has filed its suits just in time to make Wednesday’s deadline for companies involved in or affected by the spill to file claims against one another.

In its statement on Wednesday, BP said it wants “to ensure that all parties involved in the Macondo well are appropriately held accountable for their roles in contributing to the Deepwater Horizon accident”.

Cameron, meanwhile, refused to address the substance of BP’s claims, but pointed out that the suit had been filed in order to make the Wednesday deadline.

A Norwegian testing company concluded in a March 23 report that the blowout preventer’s failure was caused by a section of drill pipe that was stuck, blocking cutting devices from shearing and sealing the leaking well.

That report had been commissioned by the US interior department and the Coast Guard, and is separate from an earlier report from a White House commission, in which oil industry and regulatory missteps were held responsible for setting in motion events that led to the offshore spill, the biggest in US history.

Last June, BP created a $20 billion compensation fund for victims of the spill, including businesses, fishermen and property owners. The fund has incentives for those who agree not to sue the company, and Kenneth Feinberg, who oversees it, says that it is “working as intended”.

In a case between companies that was filed earlier, Carnival Corp, a cruise operator, filed claims against BP, Cameron, Transocean and several other companies connected to the well to recover damages for added fuel and vessel cleaning costs, as well as for lost revenue from decreased bookings.