NEW ORLEANS - (Mealey's) Transocean Deepwater Inc. and the federal government on Jan. 3 filed a consent decree in which the company has agreed to pay $1 billion in civil penalties and $400 million in criminal fines and to plead guilty to environmental crimes to resolve claims stemming from the explosion of the Deepwater Horizon oil rig in April 2010 and the ensuing oil spill in the Gulf of Mexico (In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico on April 20, 2012, MDL 2179, E.D. La.).
(Proposed consent decree available. Document #08-130111-010X.)
The proposed consent decree, which is subject to a public comment period, was filed in the U.S. District Court for the Eastern District of Louisiana. The agreement would resolve the government's civil penalty claims against Transocean and its related entities Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc. and Triton Asset Leasing GMBH.
Under the agreement, the $1 billion would resolve civil penalties under the federal Clean Water Act (CWA). In addition, Transocean and its entities would implement court-enforceable measures to improve safety and emergency response systems at all drilling rigs they own and operate in U.S. waters.
In pleading guilty to the environmental crimes charges, Transocean admitted that members of its crew aboard the Deepwater Horizon acted at the direction of BP Exploration and Production Inc. well site leaders and failed to fully investigate the security of the Macondo well. Pursuant to the agreement, $150 million of the $400 million criminal payment will go toward preserving and conserving marine and coastal ecosystems and habitat for wildlife. Another $150 million will be used to fund oil spill prevention and response efforts in the Gulf of Mexico.
The U.S. Department of Justice announced that the $1 billion in penalties for violations of the CWA is a record that exceeds the $70 million penalty paid by MOEX Offshore 2007 LLC, which was a partner in the Macondo well. The civil penalty is subject to the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012, which provides that 80 percent of the penalty will be used to fund projects in and for the Gulf area, the agency stated.
Peter Frost of the U.S. Department of Justice in Washington, D.C., and Sharon D. Smith of the U.S. Attorney's Office in New Orleans are counsel for the government.
Brad D. Brian, Michael R. Doyen, Luis Li and Daniel B. Levin of Munger Tolles & Olson in Los Angeles, Steven L. Roberts and Rachel G. Clingman of Sutherland Asbill & Brennan in Houston and Richard Sauber of Robbins Russell Englert Orseck Untereiner & Sauber in Washington represent Transocean.
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