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Transocean to pay $1.4B fine for Gulf oil spill

Transocean, the drilling company that owned the oil rig implicated in the catastrophic Deepwater Horizon oil spill in the Gulf of Mexico, will plead guilty to violating the Clean Water Act and pay a $1.4 billion fine, the Justice Department said Thursday.

Justice filed the agreement in a Louisiana court Thursday. A judge must approve the settlement.

Shares of Transocean jumped with news of the settlement, closing up more than 6% at $49.20 a share.

The settlement reflects the government’s contention that BP, a multi-national oil company based in London, is ultimately responsible for the April 20, 2010, blowout of the Macondo well that killed 11 rig workers and led to the largest oil spill in U. S. history.

BP, which owned the drilling rights to the Macondo well, leased the rig from Transocean and BP employees directed the drilling operations. BP has agreed to pay a record $4 billion in criminal penalties and plead guilty to manslaughter and other criminal charges related to the spill, but the government’s civil claims against the company remain unresolved.

In the agreement, Transocean admits criminal conduct and agrees to improve its safety procedures and emergency response at all its drilling rigs operating in U.S. waters.

Transocean’s crew continued operating even after they saw signs of problems that resulted in the explosion, assistant attorney general Lanny Breuer said.

The guilty plea acknowledges that the Transocean crew, under direction of BP’s onsite employees, failed 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.

The settlement “brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster,” Attorney General Eric Holder said. “This agreement holds Transocean criminally accountable for its conduct.”

The order filed in court Thursday dedicates $150 million of a $400 million criminal fine to restoring coastal areas and barrier islands damaged by the spill.


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