Halliburton to settle U.S. Gulf spill claims for $1.1 billion

Tue Sep 2, 2014 2:47pm EDT
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(Reuters) - Halliburton Co (HAL.N: Quote), North America's top oilfield services provider, said it reached a $1.1 billion settlement for a majority of claims related to its role in BP Plc's (BP.L: Quote) oil spill in the Gulf of Mexico in 2010.

The settlement, which includes legal fees, is subject to approval by the U.S. District Court for the Eastern District of Louisiana, Halliburton said.

The amount, to be paid in three installments over the next two years, will be put into a trust until all appeals are resolved, the company said.

"We think this is a smart move by Halliburton," said Stewart Glickman, an equity analyst at S&P Capital IQ. "While state claims by Louisiana and Alabama remain, we think this trims legal overhang."

Halliburton, whose shares were marginally lower on Tuesday, had set aside $1.3 billion for costs related to the incident.

The Macondo well blowout and rig explosion in April 2010 killed 11 people and spilled millions of barrels of oil for 87 days after the blast.

The settlement protects Halliburton from certain punitive damages if the court were to rule later that the company had been negligent or 'grossly negligent' for its role in the blowout, Chief Financial Officer Mark McCollum said.

A decision is awaited from U.S. District Judge Carl Barbier in New Orleans ascertaining the extent of negligence of BP, Halliburton and rig contractor Transocean Ltd (RIG.N: Quote).

Transocean agreed last year to pay $1.4 billion to settle U.S. government charges for its role in the disaster. BP, which also faces potential fines under the Clean Water Act in the United States, has so far paid about $28 billion.   Continued...

Oil is burned off the surface of the water near the source of the Deepwater Horizon spill in the Gulf of Mexico off the coast of Louisiana June 19, 2010. REUTERS/Lee Celano