File picture: Fire boat crews battle the blazing remnants of Transocean's Deepwater Horizon rig.HO/Reuters
A federal judge on Thursday accepted Transocean Ltd.'s guilty plea for violating the U.S. Clean Water Act and the rig contractor's payment of $400-million (U.S.) to settle U.S. criminal charges over the 2010 Gulf of Mexico oil spill at BP PLC's Macondo well.
U.S. District Judge Jane Triche Milazzo, of U.S. District Court for the Eastern District of Louisiana, accepted the plea, citing the resulting large fine as a good example of the "deterrent effect of the plea process."
The overall settlement, unveiled last month by the U.S. Department of Justice, included $1-billion in civil penalties in addition to the $400-million in criminal penalties.
The Deepwater Horizon rig, which was owned by Transocean and contracted by BP, was drilling a mile-deep well on April 20, 2010, when a surge of methane gas caused a blowout that killed 11 workers. The well spewed 4.9 million barrels of oil into the Gulf of Mexico for 87 straight days, unleashing a torrent of oil that fouled the shorelines of four Gulf Coast states and eclipsed the 1989 Exxon Valdez spill in Alaska in severity.
The accident led to a months-long U.S. deepwater ban and intense scrutiny of the offshore drilling industry, which is now booming worldwide despite lingering public concerns.
Transocean, employer of nine of the 11 workers killed, had set aside $1.5-billion for the DOJ out of a $1.95-billion loss provision for the disaster.
Transocean must still seek a settlement with the plaintiffs committee representing more than 100,000 individuals and business owners claiming economic and medical damages, so the ultimate cost of Macondo to Transocean could end up being higher. A trial is scheduled to start this month that will sort out many remaining civil claims related to the spill.
London-based BP agreed in November to a U.S. federal settlement of its own that was worth $4.5-billion, including the largest criminal fine ever at $1.256-billion. The company also pleaded guilty to obstruction of Congress, a felony; a judge approved that criminal settlement late last month.
Of the $400-million in Transocean criminal fines, $150-million will help protect the Gulf of Mexico, while another $150-million will fund spill prevention and response efforts there. Transocean must also implement court-enforceable measures to improve safety and emergency response on U.S. rigs.