Settlement puts new focus on Transocean, Halliburton

In its proposed settlement of thousands of economic damage claims over the Gulf of Mexico oil spill, BP simplified part of its own legal maze but may have made things more complicated for contractors Transocean and Halliburton.

BP's agreement last week with the Plaintiffs' Steering Committee representing thousands of private individuals and businesses included a provision transferring to those plaintiffs the rights to any money collected for legal actions against the two companies, shifting efforts once aimed at BP.

"The dynamic changes because it puts more pressure on Transocean and Halliburton to settle, and if they hold out, it presents more ways for plaintiffs to recover what they're owed," said Steve Herman, co-liaison counsel for the steering committee.

Transocean owned and operated the Deepwater Horizon rig that drilled BP's Macondo well, and Halliburton was the well's cement contractor.

BP declined to comment Monday, but a legal expert viewed its move as shrewd legal strategy.

"By assigning their claims against the subcontractors to the PSC, BP has effectively allied itself with the private plaintiffs represented by the PSC," said Blaine LeCesne, a torts law professor at Loyola University. "They will now seek to place the lion's share of the blame on Transocean and Halliburton rather than on BP."

Transocean spokesman Jared Allen said the facts of the case are unchanged, and the offshore drilling giant is prepared to go to trial if necessary.

"BP's settlement with the plaintiffs certainly didn't come as a surprise to anyone, and the terms of the financial arrangement probably won't come as much of a surprise either," Allen said.

Halliburton officials did not respond to requests for comment.

BP's settlement with the committee came just ahead of a trial that was to start Monday - and now is delayed indefinitely - on the tangle of legal claims and counterclaims arising from the April 20, 2010, blowout of the Macondo well.

The blowout destroyed the Deepwater Horizon, killed 11 men and led to a three-month underwater gusher that the government estimates spilled more than 200 million gallons of crude into the Gulf.

Effect of spill

The spill shut down commercial and recreational fishing areas and devastated the coastal beach tourist industry. In addition, some residents and cleanup workers say they suffer medical ailments from exposure to oil and chemical dispersants. The proposed settlement covers those claims against BP but not against other defendants.

And BP remains subject to possible additional fines for environmental damage that could total billions of dollars more. It estimates the settlement with the steering committee will cost $7.8 billion.

In announcing the settlement late Friday, BP said the deal provides that "to the extent permitted by law, BP will assign to the PSC certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP."

The move advances BP's argument in lawsuits against Transocean and Halliburton that they were partially responsible for the disaster.

BP is using this theory of shared responsibility as one of its main legal defenses against federal allegations that its decisions constituted gross negligence - which can nearly quadruple some fines.

Companies sued BP

Transocean and Halliburton countersued BP, arguing that their contracts with BP indemnified them.

Transocean has set aside $1 billion in estimated loss contingencies associated with the accident.

Halliburton is insured for $600 million for general liabilities but has not set aside a legal risk contingency for the Deepwater Horizon disaster. An analyst who follows Halliburton believes that it expects to make some kind of settlement.

"Halliburton's management has been consistently optimistic that as far as its participation, it would settle," said Bill Herbert, an analyst with Simmons & Company International.

"It is our view that it is going to write a check," he said.

emily.pickrell@chron.com