London, UK | – American multinational corporation, and one of the world’s largest oil field services companies Halliburton Corporation has agreed to pay $1.1 billion to settle a majority of lawsuits brought over its role in the largest offshore oil spill in U.S. history.
The agreement is subject to court approval and includes legal fees, the Houston-based company said in a statement today. Halliburton was accused by spill victims and BP Plc of doing defective cementing work on the Macondo well before the April 2010 Gulf of Mexico oil spill. Halliburton blamed the incident on decisions by BP, which owned the well.
The settlement comes as the judge overseeing oil-spill cases weighs fault for the disaster. An agreement now averts the company’s risk of a more costly judgment for some spill victims and removes much of the uncertainty that has plagued Halliburton for the past four years as investors waited to see the payout tally. With its biggest piece of liability resolved, Halliburton can refocus its attention on developing new oilfield technology that will help it boost profits worldwide.
The settlement represents the most significant payout yet for Halliburton from the explosion aboard the Deepwater Horizon drilling rig, which killed 11 workers and caused millions of barrels of oil to spill into the Gulf. The accident sparked hundreds of lawsuits against London-based BP, Halliburton and Vernier, Switzerland-based Transocean Ltd, the rig’s owner.
Transocean settled some claims for $1.4 billion last year, while BP has paid more than $28 billion and faces potentially tens of billions more.
Today’s agreement doesn’t resolve certain state lawsuits that have been filed against Halliburton, which has taken a $1.3 billion reserve for costs related to the incident, according to a July 25 earnings statement. Halliburton said it has incurred legal fees and expenses of about $294 million, with $263 million of this reimbursed or expected to be covered by insurance.
Halliburton rose 0.7 percent to $68.06 at 9:16 a.m. in New York, before the start of regular trading in U.S. markets. The shares have gained 33 percent this year before today.
The settlement will be paid into a trust in three instalments during the next two years until all appeals have been resolved. A certain level of claimants must participate in the settlement or Halliburton can terminate it. The company didn’t immediately respond to a request for comment on terms of the settlement.
The court case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).