Offshore InjuryBlog

Transocean to Pay Fines for Guilty Plea in Deepwater Horizon Crimes

One of the most talked about, and arguably most disastrous oil spills to affect maritime and offshore workers in the industry is the 2010 British Petroleum oil spill, now referred to as the Deepwater Horizon disaster. More than 2 years ago, in April of 2010, the oil spill that unabatedly flowed for 3 months in the Gulf of Mexico became known as the largest accidental maritime oil spill in the petroleum industry's history. Now, the workers who were adversely affected by the spill, as well as the friends and family of the 11 crew members who perished in the disaster, finally have something to ease the pain that resulted from the spill. On January 3, 2013, Transocean Deepwater Inc. pled guilty to violating the Clean Water Act (CWA), consequently agreeing to $1.4 billion in civil and criminal fines / penalties.

Yesterday, the Department of Justice announced that criminal information related to the spill, along with the proposition for a partial civil consent decree, were filed in the U.S. District Court in the Eastern District of Louisiana. The contents of these documents is aimed at resolving the civil penalty claims that were made by the U.S. government against Transocean Deepwater Inc., which has since signed a cooperation and guilty plea agreement with the government. In admitting its criminal conduct, the drilling company simultaneously agreed to the terms of a $400 million plea agreement – subject to the court's approval – which will account for the criminal fines and penalties attached to the disaster. Additionally, Transocean Deepwater Inc. agreed to cooperate with the government's ongoing criminal investigation of the disaster, which is expected to continue for some time.

Transocean Ocean Holdings LLC, along with Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling Inc., and Triton Asset Leasing GMBH, have also agreed to pay an unprecedented $1 billion in conjunction with the partial civil consent decree that was lodged. The money will be put toward resolving the federal Clean Water Act civil penalty claims that are connected to the three-month long oil spill at the Macondo Well. The defendants listed above will also be expected to execute any court-enforced measures that are implemented for the improvement of emergency response capabilities and operational standards of safety. These implementations will be made nationwide, at all drilling rigs that are currently working in U.S. waters.

The Deepwater Horizon oil spill, also referred to as the Macondo Well disaster, is now known to be the largest oil spill in U.S. history. Eleven deaths, three months of flowing oil pollution, and more than two years later, Transocean Deepwater Inc. has finally admitted that members of the crew onboard Deepwater Horizon at the time of the disaster were acting at the hands of BP's own "Well Site Leaders." The BP company men reportedly failed to fully investigate clear warnings of indication that the Macondo Well was not secure, thus allowing for excessive amounts of oil and gas to flow from the well with no action on their part. In consequence, hundreds of millions of dollars must now be paid to benefit the Gulf region that was adversely impacted.

Broken down, the financial division of the plea agreement is as follows. Of the $400 million criminal recovery, $150 million will be distributed to acquiring, restoring, conserving, and preserving the coastal and marine environments of Mexico's Gulf Coast. Another $150 million in funds will be used to bolster attempts at oil spill prevention and response efforts in the Gulf. The groundbreaking $1billion in civil penalties will be subject to the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economics of the Gulf Coast States Act (2012). Referred to as the "Restore Act" for short, the act stipulates that 80% of the penalty fees shall be used to fund projects in the Gulf, as well as projects for the Gulf states, that are aimed at environmentally and economically benefiting the region.

The criminal charges and guilty plea agreement that were announced yesterday are part of a larger ongoing criminal investigation that is being conducted by the Deepwater Horizon Task Force. Based in New Orleans, the Task Force includes assistant attorney generals, as well as prosecutors from many of the government's official agencies, including the FBI, EPA, U.S. Coast Guard, U.S. Attorney's Office, U.S. Fish and Wildlife Service, and more. Litigation against defendants (BP Exploration and Production Inc., Anadarko Petroleum Corporation, Transocean, and others) will continue as well. As these investigations continue, so too will updates for the pending case. You can continue to turn to the offshore injury lawyers at Arnold & Itkin LLP for the latest updates and professional feedback related to the Deepwater Horizon case.

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