BP and supplier M-I Swaco, a Houston-based drilling mud supplier, agreed Friday to settle all claims with each other over the Deepwater Horizon explosion that led to the worst oil spill in U.S. history.

M-I Swaco, also known as M-I LLC, provided drilling fluid to BP for use in the Macondo well. As it did with other companies that had a hand in the Macondo well operation, BP sought a payout from the supplier, blaming the Deepwater Horizon explosion on it in part.

In a claim filed last June, BP claims that M-I “failed to provide, control, and monitor the mud and spacer solutions used on the Deepwater Horizon in a reasonably safe manner.” According to the Associated Press, BP accused M-I of “several missteps when the drilling mud was replaced by seawater in the process of sealing the well before it blew out.”

M-I had claimed that its contract with BP indemnified it against damage claims in the event of an oil spill or other disaster. Deepwater Horizon rig owner Transcoean and cement-services provider Halliburton also argue that their contracts with BP shielded them from responsibility.

The terms of the agreement between the two companies are confidential, and it is not clear if a payment by one or the other company was involved.

M-I, a division on Schlumberger Ltd., has been named as a defendant in hundreds of lawsuits filed by individuals and businesses allegedly harmed by the 2010 oil spill. The company remains a defendant in the non-jury trial that opens next week in New Orleans.

In the first phase of the trial, U.S. District judge Carl Barbier will apportion fault for the oil spill among BP and its partners and contractors. BP has insisted that all parties involved in the Macondo well prospect are to blame for the disaster, which killed 11 workers and released 206 million gallons of oil into the Gulf of Mexico.

A BP spokesman told the AP in an email statement that M-T remains a “a valued supplier.”

Source:

Associated Press

Businessweek

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