Halliburton reaches $1.1 billion settlement in Gulf of Mexico oil spill
3 Sep 2014 12:03 AM GMT
Halliburton says it has agreed to pay $1.1 billion to settle a substantial portion of plaintiff claims arising from the 2010 Gulf of Mexico oil spill. The agreement is subject to court approval and includes legal fees, the Houston-based company said in a statement on Tuesday.
Halliburton was accused by spill victims and BP Plc of doing defective cementing work on the Macondo well before the April 2010 Gulf of Mexico oil spill. Halliburton blamed the incident on decisions by BP, which owned the well.
The settlement comes as the judge overseeing oil-spill cases weighs fault for the disaster. An agreement now averts the company’s risk of a more costly judgment for some spill victims and removes much of the uncertainty that has plagued Halliburton for the past four years as investors waited to see the payout tally. With its biggest piece of liability resolved, Halliburton can refocus its attention on developing new oilfield technology that will help it boost profits worldwide.
The settlement represents the most significant payout yet for Halliburton from the explosion aboard the Deepwater Horizon drilling rig, which killed 11 workers and caused millions of barrels of oil to spill into the Gulf. The accident sparked hundreds of lawsuits against London-based BP, Halliburton and Vernier, Switzerland-based Transocean Ltd., the rig’s owner.
Transocean settled some claims for $1.4 billion last year, while BP has paid more than $28 billion and
faces potentially tens of billions more. Tuesday’s agreement doesn’t resolve certain state lawsuits that have been filed against Halliburton, which has taken a $1.3 billion reserve for costs related to the incident, according to a 25 July earnings statement. Halliburton said it has incurred legal fees and expenses of about $294 million, with $263 million of this reimbursed or expected to be covered by insurance.
The settlement will be paid into a trust in three installments during the next two years until all appeals have been resolved. A certain level of claimants must participate in the settlement or Halliburton can terminate it.
Halliburton was accused by spill victims and BP Plc of doing defective cementing work on the Macondo well before the April 2010 Gulf of Mexico oil spill. Halliburton blamed the incident on decisions by BP, which owned the well.
The settlement comes as the judge overseeing oil-spill cases weighs fault for the disaster. An agreement now averts the company’s risk of a more costly judgment for some spill victims and removes much of the uncertainty that has plagued Halliburton for the past four years as investors waited to see the payout tally. With its biggest piece of liability resolved, Halliburton can refocus its attention on developing new oilfield technology that will help it boost profits worldwide.
The settlement represents the most significant payout yet for Halliburton from the explosion aboard the Deepwater Horizon drilling rig, which killed 11 workers and caused millions of barrels of oil to spill into the Gulf. The accident sparked hundreds of lawsuits against London-based BP, Halliburton and Vernier, Switzerland-based Transocean Ltd., the rig’s owner.
Transocean settled some claims for $1.4 billion last year, while BP has paid more than $28 billion and
faces potentially tens of billions more. Tuesday’s agreement doesn’t resolve certain state lawsuits that have been filed against Halliburton, which has taken a $1.3 billion reserve for costs related to the incident, according to a 25 July earnings statement. Halliburton said it has incurred legal fees and expenses of about $294 million, with $263 million of this reimbursed or expected to be covered by insurance.
The settlement will be paid into a trust in three installments during the next two years until all appeals have been resolved. A certain level of claimants must participate in the settlement or Halliburton can terminate it.
Next Story
