Tuesday, September 11, 2012

Transocean (NYSE:RIG) Discussing $1.5 bln settlement over oil rig explosion

The U.S. Justice Department has discussed a $1.5 billion settlement with Transocean LTD(NYSE:RIG ) to resolve civil and criminal suits against the company over its role in a 2010 rig explosion that resulted in the nation's worst offshore oil spill.

The Swiss firm owned and operated the Deepwater Horizon rig that suffered an explosion and sank in the Gulf of Mexico in 2010.

In a regulatory filing on Monday the company said that it had held no settlement talks since February with BP plc (ADR)(NYSE:BP), which had hired the rig for is Macondo project, with the plaintiff’s steering committee and the lawyers representing the business and residents in the Gulf region, who were impacted by the spill.

The details of the settlement talks, revealed in a prospectus filed on Monday, suggest that while Transocean is open to striking a deal with the US Department of Justice, it is preparing to fight BP and the private sector plaintiffs in court, FT.com reported.

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A trial of the civil case over the spill has been set for January 14 next year.

"In the prospectus, Transocean said BP and the private sector plaintiffs had proposed settlements “far in excess” of the $1.5bn deal being discussed with the DoJ. Those proposals “also far exceeded the amounts we had been willing to consider for a settlement”, Transocean added," the FT report said.

Transocean is also weighing whether the damages would extend to environmental impact under the Oil Pollution Act of 1990.

"There can be no assurance that the parties will enter into agreements on the terms described or at all," Transocean said in its filing with the Securities and Exchange Commission.

A Justice Department spokesman declined to comment.

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