Cameron International Corp agreed a $250 million settlement with BP to help pay for costs associated with the Gulf of Mexico oil spill, raising hopes that deals between the British oil major and two other contractors could follow.
The settlement with Cameron, which made the blow-out preventer that failed at BP’s doomed Macondo well, is the fourth BP has reached with parties involved in the accident which caused the biggest offshore oil spill in the U.S.
Settlement agreements with two remaining parties, Transocean and Halliburton, have to date, however, proved elusive.
Transocean, the owner and operator of the Deepwater Horizon rig, and Halliburton, which supplied cement to cap the well, are both being sued by BP to share the cost of the spill and cleanup, while the two have launched lawsuits of their own.
The settlement with Cameron will put pressure on the two remaining contractors to follow suit, analysts said.
“It shows that BP is prepared to be reasonable when settling with contractors – this ought to raise hopes that settlements with Halliburton and Transocean are more, rather than less likely to follow,” JP Morgan analyst Fred Lucas said.
Cameron International said BP had agreed to indemnify the company for current and future compensatory claims associated with the spill.
Investors, relieved that the deal removes uncertainty over Cameron’s financial obligations, pushed the oilfield service company’s shares up 7 percent.
“Cameron is the fourth company to settle with BP and contribute to economic and environmental restoration efforts in the Gulf. Unfortunately, other companies persist in refusing to accept responsibility for their roles in the accident and for contributing to restoration efforts,” BP chief executive Bob Dudley said in a statement.
Analysts at UBS said the settlement was positive for BP.
“It indicates Cameron has probably judged BP is unlikely to be found grossly negligent. We also note Cameron is the second oil service contractor to settle despite theoretically being protected by indemnity clauses,” UBS said.
Transocean said in November that it sees maintaining its contractual indemnity as the base for any potential settlement with BP.
The U.S. government in September assigned most of the blame for the disaster to BP, the operator of the well.
The settlement agreement between BP and Cameron is not an admission of liability by either party, the two companies said, acknowledging that the Gulf of Mexico oil spill resulted from “complex and interlinked causes involving multiple parties”.
The cases between the companies are among hundreds of claims set to go to trial before a federal judge in New Orleans in February to assign blame and damages for the Macondo blowout.
Cameron expects to take a charge in the fourth quarter for any amounts not covered by insurance, the Houston company said, adding that its insurers are expected to fund no less than $170 million of this agreement.
“We view the grand total is a very reasonable amount, and a significant overhang has now been removed from the company,” analysts at Raymond James said in a note to clients.
BP, which has said the total bill for the oil spill, including fines will be $42 billion, said it will place the $250 million from Cameron into the $20 billion victims’ compensation fund it established last year.
BP has to date concluded settlements with its partners in the well, Anadarko Petroleum Corp and Japanese trading house Mitsui’s exploration unit MOEX, as well as Weatherford International Ltd , which made equipment used in the well
The company has so far paid out $7.5 billion to individuals, businesses and government entities, it said.
Shares in BP closed down 0.5 percent to 445.75 pence on Friday, slightly underperforming the European index of oil and gas companies which was 0.1 percent lower.
