Transocean to Pay DoJ $1.4bn over Gulf of Mexico Oil Spill

Transocean, owner of the Deepwater Horizon oil rig which fatally exploded in 2010 and led to the largest environmental disaster in American history, will pay the US government $1.for 4bn its role in the Gulf of Mexico oil spill.

The offshore contract drilling company said on its website that it will pay the US Department of Justice (DoJ) $1bn in civil penalties and $400m in criminal penalties over a five year period, after the Macondo well explosion on the Deepwater Horizon project killed eleven employees. A Transocean subsidiary also pleaded guility to once misdemeanor violation of the US Clean Water Act, the company said.

"These important agreements, which the company believes to be in the best interest of its shareholders and employees, remove much of the uncertainty associated with the accident," the company said. "This is a positive step forward, but it is also a time to reflect on the 11 men who lost their lives aboard the Deepwater Horizon. Their families continue to be in the thoughts and prayers of all of us at Transocean."

Transocean's shares rose 2.7 percent in Zurich to change hands at 45.82 Swiss francs each in early trading. Its US listing advanced 6 percent Thursday following news of the settlement, which was $500m lower than the company had anticipated on 30 September.

Transocean still faces an impending settlement with a plaintiffs committee, which includes more than 100,000 individuals and business owners claiming economic and medical damages from the spill.

Some analysts estimate that the total cost for Transocean over the oil spill could reach $4bn, after BP settled in a similar suit for $7.8bn in liability charges.

Transocean's settlement follows BP's $4bn settlement in November last year with the DoJ, which will also be paid in instalments over the next five years. It also resolved all securities claims with US Securities and Exchange Commission (SEC), after agreeing to pay $525m over a period of three years.

In addition to the fines, BP has been temporarily banned from entering into any contracts with the US government. More than a third of BP's total revenues were drawn from the US in 2011.

Following Transocean's settlement with US authorities, BP said in a statement that the results "underscore what every official investigation has found: that the Deepwater Horizon accident resulted from multiple causes, involving multiple parties."

"In settling, Transocean has acknowledged that it played a significant role and has responsibility for the accident. Transocean is finally starting, more than two-and-a-half years after the accident, to do its part for the Gulf Coast," it adds in a statement.

However, BP emphasised that "unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well."

Halliburton performed cementing work on the Macondo well, which exploded when a surge of methane gas caused a blowout in April 2010, remains the only company to have not settled.

BP shares rose by 1.1 percent in early London trading and up over 5 percent since the beginning of December.