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BP sues Transocean for $40bn

26 April 2011

BP filed a lawsuit against Transocean, seeking at least US$40 billion in damages and other costs from the owner of the Deepwater Horizon rig. The UK supermajor also sued Cameron International’s blowout-prevention equipment was a cause “in whole or in part” of the blowout of the Macondo well and the oil spill in the Gulf of Mexico last year, BP said in a court filing.

Both complaints were filed April 20 in federal court in New Orleans, on the first anniversary of the Gulf of Mexico blowout and oil spill. BP has also filed a lawsuit against Halliburton, the company which cemented the blown out well which caused the Gulf of Mexico oil spill, saying Halliburton concealed critical information which could have prevented the disaster.
"Halliburton's improper conduct, errors and omissions, including fraud and concealment, caused and/or contributed to the Deepwater Horizon incident," BP said in a court filing. "Halliburton knew and understood it was misrepresenting material information.” “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. Transocean called the lawsuit a "desperate bid" by BP to renege on a contract to assume full responsibility for pollution and environmental costs. “This suit is specious and unconscionable,” it said in a statement.

In a separate lawsuit, BP asked US District Judge Carl Barbier, who oversees national litigation over the spill, to order Houston-based Cameron 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 it took a US$40.9 billion pre-tax charge in 2010 related to the spill, and by year end had incurred US$17.7 billion of costs. In a statement on April 20, 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 did not address the substance of BP's claims in an emailed statement, and said Wednesday was a deadline for companies tied to the spill to file claims against each other.

In one such case, cruise operator Carnival Corp 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 lost revenue from decreased bookings. A Norwegian testing company concluded in a report issued March 23 that the blowout preventer's failure was caused by a stuck section of drill pipe that blocked cutting devices from shearing and sealing the leaking well. That finding, in a report commissioned by the US Interior Department and US Coast Guard, is separate from earlier conclusions by a White House commission that oil industry and regulatory missteps set into motion events that led to the biggest offshore oil spill in US history. Last June, BP created a $20 billion compensation fund for spill victims including businesses, fishermen and property owners, with incentives for people who agree not to sue the company. Kenneth Feinberg, who oversees the fund, in an interview said it is "working as intended."

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