Transocean, U.S. Settle Liability Limit Disagreement

June 15, 2010

Transocean Ltd has resolved its spat with the Obama administration over the oil drilling company’s attempt to limit its liability in the Gulf of Mexico spill, according to court papers filed Friday.

The company and the Justice Department have been arguing for weeks over Transocean’s petition in federal court to limit its liability to just under $27 million over the sinking of its rig that was drilling the oil well for BP Plc.

Transocean seized on a 159-year-old law — the Limitation of Liability Act of 1851 — to make its case. After complaints by the Justice Department, the company told the court in Houston it did not mean to restrict claims by the U.S. government under a 1990 law on oil spills.

After haggling over legal language, Transocean filed a letter Friday and proposed a six-page order that excluded any claims or penalties that may be sought by the Obama administration and states under federal pollution and environmental laws.

“The Department of Justice has indicated to the company that it has no opposition to the proposed order,” Transocean said in a statement.

The proposed order must be signed by the judge presiding over the case.

“The order accomplishes what the government sought,” a Justice Department official said.

(Reporting by Jeremy Pelofsky; Editing by Peter Cooney)

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