Halliburton Co. agreed to pay $1.1 billion to settle a majority of lawsuits brought over 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 a statement Tuesday. 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 how much it might be hurt by payouts. 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 well blowout and explosion aboard the Deepwater Horizon drilling rig killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico. The accident sparked hundreds of lawsuits against London-based BP, Halliburton and Vernier, Switzerland-based Transocean Ltd., the rig’s owner.
The settlement represents the most significant payout yet for Halliburton from the explosion. 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.
Halliburton has taken a $1.3 billion reserve for costs related to the incident, the company said in 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.
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