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Firms in gulf drilling are working to limit liability in spill
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"There are dozens of companies that played a role in this disaster and hundreds of people who may be liable," said Florida lawyer Mike Papantonio, who represents fishermen, beach rental owners and other affected businesses.
Although BP has vowed to clean up the mess and has set up a $20 billion victim compensation fund, it also has signaled that it isn't letting others off the hook. "Other parties besides BP may be responsible for cost and liabilities arising from the oil spill, and we expect those parties to live up to their obligations," BP said in a statement Friday.
An early legal test involves Transocean, the Swiss company that owned the Deepwater Horizon rig and helped run it. BP sent correspondence in May staking claims to Transocean's insurance, court papers show. But the insurers have asked a federal court in Houston to declare that they are beyond BP's reach.
Citing BP's drilling contract with Transocean, the insurers said that Transocean's responsibility for pollution involves leaks "originating above the surface of the land or water."
"Because liabilities BP faces for pollution emanating from BP's well are from below the surface and from BP's well, those liabilities are not within the scope" of the coverage, insurers argued in parallel court filings.
Transocean took a similar position after the Coast Guard served notice on April 28 that, under a federal anti-pollution law, one of its subsidiaries was a "responsible party." Transocean responded that it has no such responsibility because discharges "are occurring nearly a mile below the surface of the water," according to a securities filing.
The insurers contesting BP's claims in the Houston court, including syndicates doing business through Lloyd's, have written policies for Transocean totaling $750 million. The company has about $1 billion of liability insurance.
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Given the spill's magnitude, several companies linked to the operation have disclosed their connection in investor reports, describing to varying degrees their potential defenses, insurance coverage and loss exposure.
Halliburton, an oil services company, said in a filing with the Securities and Exchange Commission that its work on the project was "in accordance with the well owner's instructions."
Halliburton, which carries about $600 million in liability insurance, said its contracts indemnify it against "all potential claims and expenses" -- except those for its own employees and property. In a recent investor briefing, a Halliburton executive qualified that explanation, saying the company faces damages if proven grossly negligent.
Congressional investigators have alleged that BP cut corners to save money. Halliburton predicted that one of those steps could lead to trouble, e-mails between Halliburton and BP officials show.
