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Saturday, March 2, 2024 | Back issues
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Transocean to Pay $1.4B for Deepwater Spill

NEW ORLEANS (CN) - Transocean agreed Thursday to plead guilty to environmental crime and pay $1.4 billion in penalties and fines to resolve claims over Deepwater Horizon.

The proposed partial civil consent decree was filed simultaneously with criminal information in U.S. District Court for the Eastern District of Louisiana.

Transocean Deepwater owned the drilling rig, which exploded on April 20, 2010, killing 11 people and setting off the worst oil spill in U.S. history. The explosion also blew up BP's well, Macondo Prospect, dumping 4.1 million barrels, or 172 million gallons, of oil into the Gulf of Mexico over 87 days.

Prosecutors said the conduct of Transocean and its affiliates violated the Clean Water Act.

In addition to a $1 billion penalty to resolve those claims, Transocean will also pay $400 million in criminal fines and penalties. It must also continue cooperating with the government's ongoing criminal investigation. Claims for natural resource damages and cleanup costs are not covered in the deal.

Of the criminal fines, $150 million will go toward marine, coastal and wildlife conservation. An additional $150 million will be used to fund improved oil spill prevention and response efforts.

The Justice Department says the $1 billion civil penalty is "a record amount that significantly exceeds last year's $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture."

Of this penalty, 80 percent will go toward fund environmental and economic projects for Gulf states.

Transocean must also improve the operational safety and emergency response capabilities at all their U.S. drilling rigs under the settlement.

In pleading guilty, Transocean admits its Deepwater crew members "were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well," the Justice Department said in a statement.

New safety requirements described in the settlement "include certifications of maintenance and repair of blowout preventers before each new drilling job, consideration of process safety risks, and personnel training related to oil spills and responses to other emergencies," according to the Justice Department.

The proposed civil settlement is subject to a public comment period and final court approval.

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