Halliburton agrees to $1.1 billion Gulf spill deal

Halliburton, the US oil services group, has agreed to a $1.1 billion settlement to resolve damages claims from individuals, businesses and local governments over its role in the 2010 Deepwater Horizon disaster.

The company said the deal would bring to an end "the substantial majority" of the legal action against it from the private sector and local government resulting from the blowout at BP's Macondo well in the Gulf of Mexico.

Halliburton supplied the cement intended to seal the well to prevent leaks of oil and gas, which appeared to have failed in the accident.

Vessels gather near Transocean Ltd.'s Development Driller III, right, at the BP Plc Macondo well site in the Gulf of Mexico off the coast of Louisiana, U.S., on Thursday, July 29, 2010.
Daerick E. Hingle | Bloomberg | Getty Images
Vessels gather near Transocean Ltd.'s Development Driller III, right, at the BP Plc Macondo well site in the Gulf of Mexico off the coast of Louisiana, U.S., on Thursday, July 29, 2010.

The deal follows a similar settlement for individuals and businesses that was agreed by BP in 2012, but has since descended into a protracted legal battle over its interpretation.

Halliburton's settlement is broader, however, as it includes claims from local governments that were not part of the BP deal. Halliburton is also resolving claims for punitive damages, which are a potential threat still facing BP depending on future court decisions.

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The legal actions against Halliburton covered by the settlement include claims from BP, which were assigned to private sector plaintiffs as part of their 2012 agreement.

Some claims against Halliburton for compensatory damages will have to be paid by BP, under a court ruling in January 2012.

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Stephen Herman and James Roy, the co-chairmen of the steering committee of plaintiffs' lawyers, commended Halliburton for agreeing the deal.

"Halliburton stepped up to the plate and agreed to provide a fair measure of compensation to people and businesses harmed in the wake of the Deepwater Horizon tragedy," they said in a statement.

Claimants covered by the settlement are principally commercial fishermen and charter boat operators, and owners whose property was physically touched by the oil, as well as other businesses and individuals whose incomes and livelihoods were affected in the two years after the spill.

Joe Rice, who was the plaintiffs' lead negotiator in the settlements with Halliburton and BP, said: "There are still many issues yet to be resolved related to responsibility for this tragic event four years ago that continues to negatively affect businesses and individuals throughout the gulf coast. But we are gratified that this settlement with Halliburton allows more claimants to be closer to resolution."

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Halliburton said the settlement money would be held in a trust until all appeals against the agreement are resolved over the next two years.

The company has already set aside a provision of $1.3 billion in its accounts for the cost of litigation over the Deepwater Horizon disaster.

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Last year Halliburton agreed to pay a $200,000 fine as it pleaded guilty to destroying evidence that could have been relevant to the investigation into the spill and the civil litigation, and made a voluntary $55 million contribution to the National Fish and Wildlife Foundation.

The US Department of Justice said then that there was an "ongoing criminal investigation" into the disaster. BP and Transocean, the company that owned and operated the Deepwater Horizon rig, have both agreed settlements of criminal actions from the justice department, but Halliburton has not.

—By Ed Crooks of the Financial Times

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