Transocean Is Set to Pay $1.4 Billion In Gulf Spill

http://online.wsj.com/article/SB10001424127887324374004578219533349270970.html

Offshore driller Transocean Ltd. [RIGN.VX +10.61%] will pay $1.4 billion to settle all federal civil and criminal claims relating to the 2010 Deepwater Horizon accident in the Gulf of Mexico, the U.S. Department of Justice said.

Transocean was the owner of the drilling rig that exploded in April 2010, killing 11 workers and triggering the largest offshore oil spill in U.S. history. Oil giant BP BP.LN +2.41%PLC, which had been leasing the rig to drill an exploratory well and was primarily in charge at the time of the accident, agreed to pay $4.5 billion in November to settle all criminal and some civil charges in the case.

While investors cheered the Transocean settlement and what it might mean for BP as it relates to remaining federal civil claims, the deal drew some criticism as it fell short of the Swiss company's own expectations on potential settlement costs.

Transocean will plead guilty to one criminal misdemeanor violation of the Clean Water Act for failing to properly monitor the well at the time of the blowout and pay a $100 million fine, according to documents filed Thursday. The company will also pay $1 billion in fines for civil violations of the Clean Water Act. Additionally, it will pay $150 million each to the National Fish and Wildlife Foundation and the National Academy of Sciences for oil-spill response and habitat rehabilitation. The pact is subject to a federal judge's approval.