Transocean to Pay only $1.4 Billion for Gulf Oil Explosion and Spill

Transocean Deepwater Inc., owner of the oil platform that blew up in the Gulf of Mexico on April 20, 2010, has agreed to plead guilty to charges stemming from the worst petroleum spill in U.S. history. Eleven workers were killed and sixteen injured.

The company has admitted to violating the Clean Water Act, and will pay a total of $1.4 billion in civil and criminal fines and penalties, according to the U.S. Department of Justice.

As part of the criminal settlement, Transocean will pay the National Academy of Sciences and the National Fish and Wildlife Foundation $150 million each. These monies will pay for oil spill prevention and response in the Gulf and natural resource restoration projects.

The company also accepted five years of government monitoring of its drilling practices and improved safety measures.

The deal follows a larger settlement by BP, which owned the undersea well that ruptured in March 2010. In that case, BP agreed to pay $4.5 billion to settle criminal and civil charges.

Lanny Breuer, assistant attorney general for the Justice Department’s Criminal Division, said in a prepared statement that Transocean had played a smaller role in the disaster, compared to BP.

“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs—at a tragic cost to many of them,” Breuer said. He added that the $1.4 billion “appropriately reflects its role in the Deepwater Horizon disaster.”

Not everyone was satisfied with the judgment. In a press release, the Sierra Club called the settlement “wholly inadequate to the damage these companies caused—the loss of human life and the disruption of the entire Gulf ecosystem and economy. With these weak settlements, Gulf communities, families and businesses are being sold out to Big Oil for pennies on the dollar. BP and their contractors must pay the real cost of this disaster, no less than $60 billion, and be held accountable for their careless and illegal operations that created this disaster.”

The settlement resolves only the federal government’s claims against Transocean. It still faces a large, multistate lawsuit that is scheduled to go to trial in February.

-Noel Brinkerhoff

To Learn More:

Transocean Agrees to Plead Guilty to Environmental Crime and Enter Civil Settlement to Resolve U.S. Clean Water Act Penalty Claims from Deepwater Horizon Incident (U.S. Department of Justice)

Rig Owner Will Settle With U.S. in Gulf Spill (by John Schwartz, New York Times)

Transocean to Pay $1.4B for Deepwater Spill (Courthouse News Service)

Plea Agreement (U.S. Department of Justice) (pdf)

BP Slithers away with Light Penalty for Gulf Explosion and Oil Spill Disaster (by Noel Brinkerhoff, AllGov)

Coast Guard Report Slams Transocean in Deepwater Horizon Explosion (by David Wallechinsky, AllGov)

Why the Deepwater Horizon Crew Died…Poor Training, Poor Maintenance (by Noel Brinkerhoff, AllGov)

Interior Department Gave Deepwater Horizon Operators Safety Award in 2009 (by Noel Brinkerhoff, AllGov)