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Halliburton Co, North America’s top oilfield services provider, said it reached a $1.1bn settlement for a majority of claims related to its role in BP’s fatal oil spill in the Gulf of Mexico in 2010.
The settlement, which includes legal fees, is subject to approval by the US District Court for the Eastern District of Louisiana, Halliburton said.
The amount, to be paid in three installments over the next two years, will be put into a trust until all appeals are resolved, the company said.
“We think this is a smart move by Halliburton,” Stewart Glickman, an equity analyst at S&P Capital IQ told Reuters. “While state claims by Louisiana and Alabama remain, we think this trims legal overhang.”
Halliburton provided the cement intended to seal the well in the event of a disaster. The company has since been embroiled in an ongoing series of legal actions related to the Deepwater Horizon disaster, which resulted in 11 deaths and discharged an estimated 4.9m barrels of oil into the Gulf of Mexico.
In a statement Stephen Herman and James Roy, the co-chairmen of the steering committee of plaintiffs’ lawyers, said: “Halliburton stepped up to the plate and agreed to provide a fair measure of compensation to people and businesses harmed in the wake of the Deepwater Horizon tragedy.”
The news came on the same day that BP filed a motion calling for the dismissal of Patrick Juneau, the court appointed administrator handling claims from the spill.
BP has clashed repeatedly with Juneau and accused him earlier this year of paying out “absurd” amounts based on inflated or fictitious claims.
In its latest attack the company claims it has new evidence that Juneau had a disqualifying conflict of interest when he was appointed as claims administrator. BP said Juneau had advocated for claimants as a lawyer before his appointment and had failed to get a written waiver for this conflict.
In a filing made with the US District Court for the Eastern District of Louisiana, BP claimed Juneau had “adopted positions on issues as critical as compensation protocols, documentation requirements, and release language that deviated from the settlement agreement and mirrored positions he took on behalf of his prior clients.”
The oil firm attacked his $3.4m salary and said he had “presided over a shockingly inefficient process. Over the past two years, operational costs have totaled $1bn – that’s $10,000 in costs for each claim that has received an eligibility notice, while hundreds of thousands more claims still remain to be examined.”
Juneau was not immediately available for comment.
Last month BP filed a petition to the supreme court seeking to undo parts of the massive settlement agreement agreed in the New Orleans court related to the fatal spill.
The Macondo well blowout and rig explosion in April 2010 killed 11 people and spilled millions of barrels of oil for 87 days after the blast.
The settlement protects Halliburton from certain punitive damages if the court were to rule later that the company had been negligent or ‘grossly negligent’ for its role in the blowout, Chief Financial Officer Mark McCollum said.
Halliburton provided cementing services for BP at the well, including the placement of “centralizers” that help stabilize the well bore during cementing.
The company had earlier blamed BP’s decision to use only six centralizers – to save “time and money” – for the blowout.
Reuters contributed to this report
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