Transocean Pleads Guilty, Agrees To Pay $1.4 Billion To Settle Charges Related To Gulf Oil Spill

The Deepwater Horizon before the April 2010 disaster.

The Deepwater Horizon before the April 2010 disaster.

Transocean, the offshore drilling company that operated, on BP’s behalf, the ill-fated Deepwater Horizon rig whose collapse resulted in multiple deaths and untold amounts of oil being released into the Gulf of Mexico, has agreed to plead guilty to violating the Clean Water Act and to pay a total of $1.4 billion in civil and criminal fines and penalties.

In addition to the civil consent decree that resolves the federal government’s claims against the company, Transocean Deepwater Inc. has signed a guilty plea agreement in which it admits its criminal conduct in the fatal incident.

$400 million of the money will go toward criminal fines and penalties. In pleading guilty, Transocean admits that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s “Well Site Leaders” or “company men,” were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.

The $400 million is intended to provide positive impact to the environment of the affected region, with $150 million dedicated to acquiring, restoring, preserving and conserving the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states. Some of that money will also be put to restoring barrier islands and improve coastal wetlands affected by the oil spill. Another $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

Transocean is expected to continue cooperating with the government’s ongoing investigation into criminal allegations surrounding the disaster.

The $1 billion civil penalty is for violations of the Clean Water Act tied to the three-month-long oil spill at the site of the Macondo Well. Per the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012 (Restore Act), 80% of the penalty will be used to fund projects in and for the Gulf states for the environmental and economic benefit of the region.

Separately, Transocean has agreed to implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters off the United States.

“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them,” said Lanny A. Breuer, assistant attorney general for the Justice Department’s Criminal Division. “Transocean’s agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster.”

“This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster,” said Attorney General Eric Holder. “This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states.”