By ANGEL GONZALEZ and TOM FOWLER
HOUSTON -- The US Department of Justice said it intends to
prove that BP committed gross negligence or willful misconduct
in the events leading to the Deepwater Horizon oil spill,
reiterating its previously-stated stance against the UK oil
The statement, in a
memo filed with a New Orleans federal court last Friday, put
pressure on BP shares Wednesday after being reported by the
Financial Times, a sign of the lingering risk the 2010
disaster still poses to the company.
But some analysts stressed that it said nothing new.
Recent headlines appear to be much ado about
nothing, said Thomas Claps, an analyst with
Susquehanna Financial Group.
The DOJ has always claimed that BP and other parties
were grossly negligent, and that it would be seeking maximum
penalties, so these statements should come as no surprise to
investors, Mr. Claps said.
In the filing, made in response to a previous BP request to
accept a $7.8 billion settlement between the company and
thousands of plaintiffs over economic losses and property
damage, the Department of Justice said that BP had a culture of
recklessness, and also pointed the finger to Transocean, the
offshore contractor that owned the Deepwater Horizon rig leased
BPs gross negligence and willful misconduct are
inextricably joined with the acts and omissions of
Transocean, the government said.
In April 2010, a blow-out at the well drilled by the
Deepwater Horizon rig killed 11 and unleashed the worst
offshore spill in US history.
The government, however, did not oppose the settlement
between BP and the plaintiffs.
BP said in a statement that the government made clear
that it does not oppose the settlement, and that
other issues raised by the government simply illustrate
that disputes about underlying facts remain. BP believes it was
not grossly negligent and looks forward to presenting evidence
on this issue at trial in January.
Transocean didn't immediately respond to a request for
Analysts with Tudor, Pickering, Holt & Co. said that the
feisty tone in the latest governments broadside could
mean that a settlement is less likely than previously thought,
and court hearings could last years.
David Pursell, a managing director at Tudor, noted the
absence of Halliburton in the government filings, and took that
as further indication that the energy-services firm was
unlikely to face civil penalties for its role as the cement
contractor on the well.
From a markets standpoint it's important because there
had been this overhang for Halliburton, Mr. Pursell said.
The company didn't immediately respond to a request for
The U.S government is seeking civil penalties under the
Clean Water Act that could total billions of dollars.
The law allows the government to collect between $1,100 and
$4,300 for every barrel of oil that spilled, depending on
whether the company is found to have acted with negligence. A
government-led group estimates that 4.9 million bbl of oil
spilled into the Gulf.
Tudor, Pickering, Holt & Co. analysts say that if gross
negligence is proven, fines could amount to $18 billion, versus
just $5 billion if BP is found to be just
Dow Jones Newswires