NEW ORLEANS – A federal judge was expected to decide Thursday whether to approve Transocean Ltd.’s agreement with the Justice Department to plead guilty to a misdemeanour charge and pay $400 million in criminal penalties for its role in the massive 2010 oil spill in the Gulf of Mexico.
U.S. District Judge Jane Triche Milazzo has said she either will accept Transocean’s guilty plea and impose the agreed-upon sentence or reject it and allow the Swiss-based drilling company to withdraw from the deal. She can’t order changes to terms of the settlement.
Transocean agreed last month to plead guilty to a misdemeanour charge of violating the Clean Water Act. In addition to the $400 million in criminal penalties, the company also agreed to pay $1 billion in civil penalties. A different judge will decide whether to accept that part of the settlement.
In a court filing last week, lawyers for the company and the federal government wrote that the deal represents “fair, just, and appropriate corporate punishment for Transocean’s role in the largest environmental disaster in United States history.”
Transocean owned the Deepwater Horizon drilling rig, which sank after an explosion killed 11 workers and triggered the spill in April 2010. BP PLC leased the rig from Transocean. BP’s Macondo well spewed more than 200 million gallons after the blowout a mile under the Gulf surface off the Louisiana coast.
Much of the $1.4 billion Transocean agreed to pay will fund environmental-restoration projects and spill-prevention research and training.
BP separately agreed to pay a record $4 billion in criminal penalties and has pleaded guilty to manslaughter and other criminal charges related to the spill. The deal with BP, which U.S. District Judge Sarah Vance approved last month, doesn’t resolve the federal government’s civil claims against the London-based oil company.
Last week’s court filing says the failure by BP rig supervisors and Transocean crew members to properly investigate abnormally high pressure readings during a crucial safety test, called a negative test, was a “proximate cause” of the blowout and spill. But it was BP that determined whether and how the testing would be conducted, the filing adds.
“BP, through its (supervisors) stationed on the Deepwater Horizon, was responsible for supervising the negative testing, and had the ultimate responsibility to ensure all operations, including the negative test, were conducted safely and according to the industry standard of care,” it says.
The $400 million in criminal penalties Transocean agreed to pay would be the second-highest criminal environmental recovery in U.S. history, trailing only BP’s $4 billion payment.
The company has two years to pay the $1 billion civil penalty. Transocean previously announced it had reserved $2 billion for paying claims tied to the Deepwater Horizon disaster.
Transocean also said in a September regulatory filing that it rejected settlement offers last year from BP and a group of lawyers representing Gulf Coast residents and businesses who blame the spill for economic damage. Those claims are still pending.
The first phase of a trial scheduled to start Feb. 25 is designed to identify the causes of BP’s Macondo well blowout and assign percentages of fault to the companies involved.