December 15, 2010

US files lawsuit against BP for oil spill

The U.S. Justice Department today filed a civil oil-spill lawsuit against BP and several other companies.  The suit is the federal government's first major legal action in the Gulf of Mexico disaster.

The other defendants are subsidiaries of Transocean Ltd., which owned and operated the Deepwater Horizon oil rig; Anadarko Petroleum Corp. and MOEX Offshore 2007, which had financial stakes in the oil well; and QBE Underwriting Ltd./Lloyd's Syndicate 1036, a BP insurer.  Halliburton Co., which designed and pumped the cement used in the well, wasn't named in the lawsuit.

The government's civil claims, filed in a New Orleans federal court, seek penalties and damages under the Oil Pollution Act and the Clean Water Act.

Notably, the Justice Department is seeking to hold some defendants liable without limitation under the Oil Pollution Act for oil-spill-removal costs and other damages, including damages to natural resources.

The lawsuit doesn't put a price tag on the amount of damage caused by the spill. A total assessment of damages to natural resources could take years.

The government is also seeking civil penalties under the Clean Water Act that could total billions of dollars. The act allows the U.S. to seek as much as $1,100 per barrel spilled, and even higher penalties in cases of gross negligence.

A government-led group estimated that 4.9 million barrels gushed out of the well, though some of it was captured. BP has said privately that the flow rate may have been 20% to 50% less.

The Justice Department's legal complaint follows an array of private-party lawsuits filed in the wake of the April 20 oil-rig explosion, which killed 11 people and produced the worst offshore oil spill in U.S. history.

The Justice Department alleged in its complaint that important safety and operating regulations were violated in the period leading up to the spill. The department said defendants failed to take necessary precautions to keep the well under control leading up to the explosion and failed to use the best available technology to monitor the well's conditions.

The defendants also failed to maintain continuous surveillance and use the best equipment to protect workers, equipment and the environment, the Justice Department said.

The lawsuit will be consolidated in the multidistrict litigation that is pending before a New Orleans federal judge.


  1. it's about time, but why wasn't haliburton named in the suit??

  2. Nigeria has agreed to a reported $250 million settlement to end bribery charges against former Vice President Dick Cheney and his former business Halliburton Co. related to natural gas contracts in the country. The case involves an alleged $182 million in bribes paid to obtain $6 billion in contracts for a natural gas plant in southern Nigeria.