BP sues 3 companies over alleged roles in Deepwater Horizon spill

Story updated at 2:30 EDT to include comment from Halliburton Co.

BP PLC marked yesterday's anniversary of the Deepwater Horizon disaster in the Gulf of Mexico by suing three companies that worked on the doomed Macondo well.

Late yesterday, BP announced it had filed claims against Transocean Ltd., the operator of the rig; Halliburton Co., the cement contractor on the well; and Cameron International Corp., which built the blowout preventer that failed to stop the flow of oil.

BP's aggressive move was not unexpected, particularly as yesterday was the deadline for parties to file claims against each other. Most legal experts assumed that all the companies would file claims against each other and that is what has happened.

All are seeking to limit their losses in ongoing litigation involving affected states, the federal government and individuals affected by the spill. The final bill is likely to be in the tens of billions of dollars.


BP could face an uphill battle against the three companies it sued yesterday in the U.S. District Court for the Eastern District of Louisiana due to indemnity agreements that contractors sign before agreeing to work on a drilling operation.

The oil company will likely need to prove gross negligence on the part of the contractors.

"If BP can prove that the contractors were grossly negligent, it could recover," said Rena Steinzor, an environmental law expert at the University of Maryland School of Law.

Based on what the federal oil spill commission said last year about the role of Transocean and Halliburton in the period leading up to the explosion and spill, their conduct "could rise to that level," she added.

BP is seeking at least $40 billion from Transocean in damages and "contribution from Transocean for the costs, expenses, injuries and damages that BP has incurred" in the aftermath of the spill, the complaint states.

"The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed," the filing says.

In the claim against Halliburton, BP focused on the findings of the spill commission, which concluded that the contractor knew that the cement mix used on the well may not have been stable enough (E&ENews PM, Oct. 28, 2010).

"Halliburton could not have caused the resulting damage without concealing from BP material facts and expert opinions about its cement slurry, including its properties, weaknesses, and its likelihood of failure," the suit says.

In the Cameron filing, BP claims the blowout preventer "did not meet the standards of a reasonable manufacturer and service provider, resulting in a BOP that failed to properly operate when needed and was unreasonably dangerous when used as intended."

BP says all three companies should be held "responsible in whole or in part" for the spill.

A spokesman said the claims against the contractors were "consistent with the conclusions reached" by the oil spill commission.

Transocean, which has filed its own claims against BP, said in a statement that BP's claims were "specious and unconscionable."

Deepwater Horizon was a "world-class drilling rig manned by a top-flight crew that was put in jeopardy by BP, the operator of the Macondo well, through a series of cost-saving decisions that increased risk," the statement said.

In a separate statement posted on its website, Transocean said that, as part of the contract it signed with BP, the oil company "agreed, among other things, to assume full responsibility for and defend, release and indemnify Transocean from any loss," including as a result of "pollution or contamination."

Rhonda Barnat, a spokeswoman for Cameron, noted that it has also filed claims against other parties in the litigation.

It is "not not surprising that the companies are filing to protect their indemnity rights," she added.

A Halliburton spokesman said the company "remains confident that we executed our work on the Macondo well under BP's direction and according to their plan."

Halliburton has also filed claims against BP designed "simply to enforce the indemnity BP provided to Halliburton in our contract with them," the spokesman added.

In a related development, the National Oceanic and Atmospheric Administration, which is helping to oversee the environmental damage assessment in the Gulf, announced today that BP has agreed to pay $1 billion toward coastal restoration projects.

"The agreement in no way affects the ultimate liability of BP or any other entity for natural resource damages or other liabilities," NOAA said in a statement.

Under the terms of the agreement, each of the five affected states -- Florida, Alabama, Mississippi, Louisiana and Texas -- will be able to allocate $100 million.

NOAA and the Department of the Interior will also have $100 million each to spend as they see fit.

The remaining $300 million will be allocated by the federal government to fund proposals suggested by the states.



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