Transocean, Halliburton say BP contracts clearly indemnified them against oil spill liability

After BP settled oil-spill liability issues with Cameron International, the fourth of its Deepwater Horizon partners and contractors to reach an agreement with the oil giant, BP CEO Robert Dudley took a shot at the two remaining holdouts: Halliburton and Transocean. Both companies have refused to accept blame for the disastrous oil spill, which flooded the Gulf of Mexico with more than 200 million gallons of crude in the spring and summer of 2010.

“Unfortunately, other companies persist in refusing to accept responsibility for their roles in the accident and for contributing to restoration efforts,” Dudley said following the Cameron agreement.

Tensions between BP and Halliburton increased on December 3, when BP accused the contractor of intentionally destroying cement samples, test results, and computer models that, it alleged, would have demonstrated Halliburton’s role in the Deepwater Horizon explosion. Halliburton denied the accusation, and this week BP ratcheted up its offense by suing the former contractor for all costs and damages related to the oil spill.

But whether or not Halliburton employees played a role in causing the Deepwater Horizon explosion and oil spill, the fact remains that it had a contract with BP that clearly required the oil giant to indemnify it from all damage claims, even in the event that, as Halliburton pointed out, its employees were found to be partially responsible for the disaster.

Transocean, which owned the Deepwater Horizon rig and leased it to BP for exploratory drilling, also had indemnity clauses in its contract with BP. In a motion for summary judgment filed in U.S. District Court in New Orleans, Transocean says BP contractually assumed the liabilities that it is now trying to pin on others.

“Instead of living up to its word—not to mention its sloganeering to ‘make things right’—BP refused to …’PROTECT, RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS’ Transocean,” the motion states, adding that BP’s refusal to release it from liability counters not just its contractual obligations but accepted industry standards as well.

“Major international corporations, like private citizens, must honor their promises,” Transocean concluded. “If BP, a major oil company with legions of attorneys is allowed to simply ignore contracts which have been in existence for decades, what does this say about our legal system? What does this bode for the thousands of contractors working throughout the Gulf Coast?”