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US sues BP for unlimited damages over Gulf oil disaster

Eight other companies named in lawsuit alleging safety violations in incident that killed 11 workers on platform
A pelican sits in a pool of oil that spilt in the Gulf of Mexico in June. The US government has sued BP and eight other companies over the oil spill.
A pelican sits in a pool of oil that spilt in the Gulf of Mexico in June. The US government has sued BP and eight other companies over the oil spill.

The US government has sued BP and eight other companies over the Macondo disaster in the Gulf of Mexico, in the first of an expected series of federal lawsuits.

The civil complaint filed on Wednesday in the US district court in New Orleans alleges safety violations the US justice department claims "caused or contributed to" the huge spill from BP's Macondo well that started on April 20.

In addition to BP, the suit names as defendants the US oil producer Anadarko Petroleum and an affiliate; a subsidiary of Japan's Mitsui Oil Exploration; three subsidiaries of the drilling contractor Transocean; the Swiss-based Triton Asset Leasing; and a subsidiary of the Australian group QBE Insurance.

Eric Holder, the US attorney general, said: "We intend to prove that these defendants are responsible for the government removal costs, economic losses, and environmental damages without limitation.

"Even though the spill has been contained, the department's focus on investigating this disaster and preventing future devastation has not wavered," he said. "Both our civil and criminal investigations continue and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the Gulf area and its economy is moving forward."

The complaint accuses the defendants of collective failure to take necessary precautions at the drilling site to prevent a loss of well control, use the best available monitoring technology, maintain continuous surveillance and deploy necessary safety equipment.

BP's stock was the biggest loser yesterday on the blue-chip board of the London Stock Exchange, falling nearly 2 per cent in morning trading.

The company said it had anticipated the lawsuit and would answer the allegations "in a timely manner". It said it would continue to co-operate with all government investigations and inquiries regarding Macondo.

"The filing is solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit," the company said.

"Alone among the parties, BP has stepped up to pay for the clean-up of the oil, setting aside US$20 billion [Dh73.5bn] to pay all legitimate claims," it said. "We took these steps before any legal determination of responsibility and will continue to fulfil our commitments in the Gulf as the legal process unfolds."

In addition to damages, the 27-page complaint seeks unspecified civil penalties under the US Clean Water Act against all the defendants except QBE Insurance. Those could amount to tens of billions of dollars, US legal experts predicted.

Under the clean water act, federal authorities may seek as much as $4,300 a barrel of spilt oil, lawyers representing the US government said in a court filing in September in New Orleans. The government estimates that the volume of crude spilt from the Macondo well may have exceeded 4.5 million barrels.

Mr Holder said on Wednesday: "We allege that the defendants named in this lawsuit were in violation of the act throughout the months that oil was gushing into the Gulf of Mexico, and we intend to hold them fully accountable for their violations of the law.

"Over the past year, I have visited the Gulf region multiple times. I have seen the devastation that this oil spill caused throughout the region - to individuals and families, to communities and businesses, to coastline, wetlands and wildlife."

The other oil firms named in the suit took immediate steps to distance themselves from BP, which has so far drawn the most criticism from Barack Obama, the US president, and his administration. BP holds a 65 per cent interest in Macondo and is the operator of the well.

Transocean, which leased its Deepwater Horizon platform to BP to drill the ill-fated well, said it was indemnified against responsibility for the spill because that lay "solely with the well's owner and operator".

Anadarko and Mitsui said that, as minority owners of the well, they were not involved in decisions aboard the rig.

Mr Holder said the civil suit did not rule out criminal charges being laid against BP and others. The parallel "very serious" criminal investigation was progressing as fast as possible, he said.

Defendants in a criminal trial might include the oil services firm Halliburton, based in the US and UAE, which was notably missing from those listed in the civil case. Halliburton was in charge of cementing the Macondo well to seal it after drilling operations ended. It has declined to comment on the US government investigation.

Washington filed its civil suit against BP as the WikiLeaks website revealed US diplomatic cables disclosing that BP suffered a well blow-out and gas leak at a platform in Azerbaijan's sector of the Caspian Sea in September 2008.

The cables revealed the incident at the Azeri-Chirag-Guneshli field, which BP considers to be among its core projects worldwide, bore similarities to events preceding the Macondo spill. In contrast to the later accident, which sank the Deepwater Horizon platform and killed 11 workers, there was no gas explosion aboard the Caspian platform. BP evacuated all 212 workers from two offshore Azeri gasfields that it temporarily closed after the blowout.

Published: December 17, 2010 04:00 AM

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