BP plc won’t be able to collect from Halliburton Co. any of the cleanup costs and economic losses that resulted from the Macondo well blowout in 2010 in the deepwater Gulf of Mexico (GOM), a district judge in New Orleans has ruled. U.S. District Judge Carl Barbier earlier in January made a similar ruling for Transocean Ltd.

BP filed a lawsuit last year to recover from Halliburton Co., Transocean Ltd. and Cameron International some of the estimated $40 billion in costs and losses that followed the well explosion (see Daily GPI, April 25, 2011) The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179. Halliburton was the well cementing contractor, Transocean owned the Deepwater Horizon drilling rig and Cameron manufactured the blowout preventer for the Macondo well. Cameron and BP settled their lawsuit in December (see Daily GPI, Dec. 19, 2011).

In his ruling Tuesday U.S. District Judge Carl Barbier said BP must indemnify Halliburton for damage claims under the drilling contract even if Halliburton is found grossly negligent for the spill.

“BP is required to indemnify Halliburton for third-party compensatory claims that arise from pollution or contamination that did not originate from the property or equipment of Halliburton located above the surface of the land or water, even if Halliburton’s gross negligence caused the pollution,” Barbier wrote. However, he said Halliburton’s indemnity could be voided if it was found to have defrauded BP.

Punitive damage awards or civil penalties assessed under the federal Clean Water Act against Halliburton would not have to be covered by BP, Barbier ruled. The judge ruled that BP would have to indemnify Transocean under the same stipulations.

On Feb. 27 the litigants are scheduled to meet in Barbier’s district court in New Orleans. The judge is to preside over the initial BP spill trial, which is meant to establish which parties are responsible for how much of the damage claims filed by thousands of plaintiffs. The damage claims won’t include penalties and costs to be sought by federal, state and local governments.

In court documents BP has attempted to recoup some of its billions in cleanup and economic losses costs by going after its Macondo well contractors and its partners.

Among the litany of accusations, BP has accused Halliburton of intentionally destroying key evidence and of “negligent misrepresentation” and “defamation” in public statements about BP’s role in the tragedy. Halliburton has claimed that BP improperly “poached” its expert engineer Michael Viator, who Halliburton claimed took a computer drive containing confidential information relating to the Macondo disaster. (Halliburton successfully petitioned the court to have Viator disqualified from testifying for BP.) Transocean has claimed in court documents that BP improperly withheld data related to the spill to hamper internal investigations and to renege on obligations to indemnify it.

“While BP’s efforts have offset some of its estimated $40 billion in costs, the final extent of the company’s liability will largely be determined by Judge Barbier, who is overseeing the massive multidistrict litigation arising from the spill,” said lawyer Douglas McCollum. “The bench trial set for late February is known in maritime law (which is governing many aspects of the case) as a limitation of liability action, a proceeding dating to the mid-19th century whereby ship owners may seek to cap their financial exposure to the value of their lost vessel.”

To apportion blame, Barbier has devised a “three-stage trial,” said McCollum. “Phase one, or the incident phase, will examine the causes of the blowout. Phase two will look at issues surrounding post-blowout attempts to control the damaged well, which spewed about 200 million gallons of crude into the Gulf of Mexico over the course of three months. Phase three will deal with containment efforts, especially the heavy use of chemical dispersants that has spawned its own bevy of lawsuits with an additional cast of ‘responder’ defendants.”

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.