Transocean (NYSE: RIG) to Pay $1.4 Billion Settlement

Brian Hicks

Written By Brian Hicks

Posted January 7, 2013

Transocean Ltd. (NYSE: RIG), owner of the infamous Deepwater Horizon rig, reached a settlement with the Justice Department in which it will pay $1 billion in civil penalties and another $400 million in criminal penalties.

80 percent of the $1 billion will be directed toward environmental-restoration work across the Gulf states, as mandated by Congressional legislation.

The company will also plead guilty to violating the Clean Water Act.

From NPR:

“While this small step forward will not bring back the 11 lives that were lost or reverse the extraordinary damages caused by the Deepwater Horizon disaster, it is incremental progress in Transocean making it right,” Louisiana Gov. Bobby Jindal said in a statement. “Natural resources damages and response costs are excluded from this agreement. Now the focus remains on BP to fulfill the commitments of their PR campaign to put this tragedy behind us.”

This arrangement brings to a conclusion a long-running civil and criminal probe led by the Justice Department investigating Transocean’s role in the Deepwater disaster.

Under the terms of the arrangement, Transocean must implement various operational safety protocols as well as emergency response systems across all oil rigs it operates.

Separately, BP PLC (LON: BP) has already reached an agreement to pay $4.5 billion in penalties and plead guilty to manslaughter and several other criminal charges. That $4.5 billion penalty set a new record for such cases.

However, that settlement still doesn’t put to an end the U.S. government’s civil claims against BP. Just last month, U.S. District Judge Carl Barbier (New Orleans) approved a class-action-settlement wherein BP might pay as much as $7.8 billion to resolve claims brought by a team of private plaintiffs’ attorneys.

Next month, Barbier will preside over a trial aimed at identifying what was behind the well blowout, and he will seek to distribute percentages of fault to all companies involved.

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