Transocean Agrees To $1 Billion Deepwater Horizon Settlement
To address the government's pending civil claims, Transocean has agreed to pay $1 billion in CWA civil penalties over a period of three years. Additionally, the company has agreed to implement certain measures to prevent a recurrence of an uncontrolled discharge of hydrocarbons. Transocean has agreed to consult with the United States in preparing a performance plan for these improvement measures, which must be submitted for the government's approval within 120 days of this agreement taking effect.
Any potential claims associated with the Natural Resources Damage Assessment (NRDA) process are excluded from the agreement with the Department of Justice. However, the district court previously held that Transocean is not liable under the Oil Pollution Act for damages caused by subsurface discharge from the Macondo well. Assuming that this ruling is upheld on appeal, Transocean's NRDA liability would be limited to any such damages arising from the above-surface discharge.
The Department of Justice has agreed that it will not pursue further prosecution of Transocean Ltd. and certain of its subsidiaries for any conduct regarding any matters under investigation by the Deepwater Horizon Task Force relating to or arising out of the Macondo well blowout, explosion, spill or response. Transocean has agreed to continue to operate with the Deepwater Horizon Task Force in any ongoing investigation related to or arising from the accident. The civil and criminal agreements are subject to court approval and, in the case of the civil agreement, public notice and comment.
Timing of Payments
Pursuant to the agreements, Transocean will pay fines, penalties and recoveries totaling $1.4 billion over a five-year period according to the following schedule:
2013 - payments totaling $560 million
2014 - payments totaling $460 million
2015 - payments totaling $260 million
2016 - payments totaling $60 million
2017 - payments totaling $60 million
In addition, civil penalties will bear interest from the date that the consent decree is lodged with the court. Neither settlement payments nor accrued interest are deductible for tax purposes.
Forward Looking Statements
The statements made in this press release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements addressing activities, events or developments that Transocean expects, believes or anticipates will or may occur, including but not limited to, the final disposition of the settlement agreement(s) with the Department of Justice, sources of funds and potential for future indemnities or claims and submission and approval of the performance plan, are forward-looking statements. These forward-looking statements are based on certain assumptions made by Transocean in reliance on current conditions, expected future developments and other factors Transocean believes are appropriate under the circumstances. Such statements are inherently uncertain and are subject to numerous risks, uncertainties and assumptions, many of which are beyond the Transocean's control, including court approval of the criminal plea agreement and the civil consent decree, public comment on the consent decree, actions by the court or the Department of Justice and other governmental agencies or bodies, availability of financing, actions by financing sources, compliance with the consent decree and the plea agreement and factors described further in Transocean's most recently filed Form 10-K, in Transocean's Forms 10-Q for subsequent periods, and in Transocean's other filings with the SEC, which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Transocean's actual results and plans could differ materially from those implied or expressed by any forward-looking statement. Each forward-looking statement speaks only as of the date of the particular statement, and Transocean undertakes no obligation to publicly update or revise any forward looking statements, except as required by law.
Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.
Transocean owns or has partial ownership interests in, and operates a fleet of, 82 mobile offshore drilling units consisting of 48 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment drilling rigs), 25 Midwater Floaters and nine High-Specification Jackups. In addition, we have six Ultra-Deepwater Drillships and three High-Specification Jackups under construction.
For more information about Transocean, please visit the website www.deepwater.com.