Halliburton Co. has reached a tentative $1.1 billion settlement with a majority of plaintiffs involved in the 2010 Macondo well blowout in the Gulf of Mexico.
Halliburton Energy Services Inc. (HESI), the cement contractor for the BP plc-operated well, reached the agreement with the Plaintiffs' Steering Committee (PSC), which is overseeing litigation to resolve most of the "legitimate economic loss and medical claims" from the devastating blowout that killed 11 men and brought Gulf Coast drilling to a standstill over a four-month period.
The settlement requires approval by U.S. District Court Judge Carl A. Barbier of the Eastern District of Louisiana, who is overseeing the multi-district litigation (MDL). The eligible claimants are individuals and businesses that are part of an existing agreement that PSC reached with BP in 2012 (see Daily GPI, March 6, 2012).
"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," said co-lead plaintiffs' attorneys Stephen J. Herman and James P. Roy.
The settlement could resolve Halliburton's liability to private plaintiffs and local governments for most of its exposure. Transocean Ltd., which owned and operated the doomed Deepwater Horizon drilling rig, and BP, "continue to have significant liabilities to private plaintiffs and state/local governmental entities," the attorneys said.
The agreement with Halliburton includes claims that BP assigned to the settlement class in the 2012 settlement; punitive damages claims against Halliburton by plaintiffs that allege damages to property or associated with the commercial fishing industry arising from the incident; and affirmation that the company has no liability for compensatory damages to the members of the settlement class in the BP 2012 settlement.
As part of the settlement process, Barbier is to appoint an allocation special master to determine what portion of the aggregate amount paid by Halliburton would be distributed to each of the two classes. The court also would appoint a claims administrator to determine how the funds would be distributed.
The settlement funds are to be placed in a trust that would pay out over two years after other appeals have been resolved, including BP's fight over the 2012 settlement, which it has taken to the U.S. Supreme Court.
The 2012 settlement by BP was one of the largest class-action settlements in U.S. history, but the original $7.8 billion agreement was uncapped, and BP wants the U.S. Supreme Court to review the PSC agreement terms (see Daily GPI, Aug. 4). BP CEO Bob Dudley said recently that the operator no longer can provide a reasonable estimate of the settlement costs, in part because of lower court rulings. Halliburton's final settlement with PSC could hinge on the high court's decision.
Halliburton's previously accrued loss contingency provision relating to MDL proceedings was estimated at $1.3 billion.
In July 2013 a unit of Halliburton agreed to plead guilty to a misdemeanor count of destroying evidence in connection with the Macondo incident (seeDaily GPI, July 29, 2013). The oilfield services giant agreed to pay the U.S. Department of Justice (DOJ) a maximum fine of $200,000 and be on probation for three years. Separately at that time, Halliburton donated $55 million to the National Fish and Wildlife Foundation, which DOJ said was not a condition of its acceptance of the plea agreement.
In January, former Halliburton director of cementing technology Anthony Badalamenti was sentenced to one year of probation, 100 hours of community service and a $1,000 fine for destroying evidence related to the blowout (see Daily GPI, Jan. 21; Sept. 23, 2013). During a post-spill review, prosecutors said he instructed two fellow employees to delete relevant data on the cement job.