BP Oil Spill: Government Sues, Seeking Billions

The Justice Department filed a civil lawsuit against BP for Gulf oil spill.

December 15, 2010, 5:12 PM

Dec. 15, 2010— -- The Justice Department filed suit today against BP and eight other companies it says are responsible for this summer's massive Gulf of Mexico oil spill. The government is trying to recover tens of billions of dollars in penalties and damages.

The lawsuit seeks to recoup costs and damages under the Oil Pollution Act and impose additional penalties to the tune of up to $20 billion under the Clean Water Act.

Under the Clean Water Act, the companies can be fined up to $4,300 a barrel. The federal government estimates some 4.9 million barrels spilled into the Gulf following the April 20 Deepwater Horizon rig explosion that killed 11 people.

"We intend to prove these violations caused or contributed to the massive oil spill," Attorney General Eric Holder said today.

He said the federal government intends to hold the companies "accountable for violations of the law."

The lawsuit says inadequate cement contributed to the disaster, but Halliburton Co., which supplied the cement, is not named in the suit.

Holder said additional defendants, potentially including Halliburton and Cameron International, the manufacturer of the critical blow-out preventer, could still be named in both the civil and criminal suits.

"This is an ongoing process," Holder said.

Department of Justice lawyers and investigators are still working to determine the full extent of damages to businesses, individuals, and the environment, Holder said.

Until a full accounting could be completed, the government would not put a price tag on the total amount of money it is seeking. Officials said the government retains the right to increase the money sought as new information is obtained.

The government alleges the companies failed to failed to take necessary precautions to keep the Mocando Well under control; failed to use the best available and safest drilling technology to monitor the well; failed to maintain continuous surveillance of the well; and failed to use and maintain equipment and material that were available to maintain the safety of the well.

BP Oil Spill: Government Sues for Damages

Hundreds of class-action suits brought by the fishing, tourism, and seafood industries are already making their way through the courts.

In addition to the federal government, Alabama and Louisiana have also filed suit against BP and other companies.

The firms currently named in the federal suit are: BP Exploration and Production Inc., Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc, Transocean Deepwater Inc, Anadarko Exploration & Production, Anadarko Petroleum Corporation, MOEX Offshore 2007 LLC (a division of Mitsui Oil corporation), Triton Asset Leasing, and BP's insurer QBE Underwriting/Lloyds.

"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," BP said in a statement in response to the suit.

"BP will answer the government's allegations in a timely manner and will continue to cooperate with all government investigations and inquiries," the company said. "Alone among the parties, BP has stepped up to pay for the clean-up of the oil, setting aside $20 billion to pay all legitimate claims. We took these steps before any legal determination of responsibility and will continue to fulfill our commitments in the Gulf as the legal process unfolds."

Transocean took another approach in responding the government's suit – blame BP and government itself.

"The calculations, blueprints and step-by-step construction procedures for the Macondo well were crafted by BP engineers and approved by federal regulators," Transocean said.

"Responsibility for hydrocarbons discharged from a well lies solely with the well's owner and operator. This fact is made clear by both the letter and spirit of the law, is reinforced in official contracts between BP and other parties – including Transocean and the U.S. Government – and was reaffirmed by BP in public statements following the incident. Transocean is indemnified in this matter," read the statement.

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