Judge says BP to indemnify Halliburton for gulf oil spill

By OGJ editors

BP PLC is required to indemnify Halliburton Co. for third-party compensatory claims involving pollution or contamination that did not originate from Halliburton property or equipment located above the surface of land or water in the Apr. 20, 2010, Macondo well blowout and resulting oil spill, a New Orleans federal judge ruled Jan. 31.

US District Judge Carl Barbier issued the ruling to address Halliburton's and BP's cross motions for partial summary judgment regarding indemnity.

BP, operator of the Macondo well, has alleged that Halliburton committed fraud and breached the contract. Barbier said fraud could void an indemnity clause.

Halliburton handled the cement job on the Macondo well. The blowout caused an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 crew members and resulting in a massive oil spill in the Gulf of Mexico. The semi later sank.

Barbier ruled BP does not owe Halliburton indemnity to the extent Halliburton is held liable for punitive damages, and he did not express an opinion as to whether Halliburton will be held liable for punitive damages.

In addition, Barbier said BP does not owe Halliburton indemnity to the extent Halliburton is held liable for civil penalties of the Clean Water Act.

Barbier on Jan. 26 granted Transocean partial indemnification in Transocean’s request for a summary judgment (OGJ Online, Jan. 27, 2011).

Regarding the Halliburton and Transocean rulings, BP said the court sent "a strong signal that contractors involved in critical well operations will be held accountable for their actions under the law."

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