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Halliburton's agreement to pay more than $1 billion to settle numerous claims involving the 2010 BP Gulf of Mexico oil spill could be a way for the company and victims of the spill to avoid years of costly litigation if all the pieces fall into place.
A federal judge still has to approve the settlement. That same judge has rulings pending on the extent to which parties, including Halliburton, were negligent in the deadly explosion of the Deepwater Horizon offshore oil rig. Those rulings could affect plaintiffs' decisions on whether to participate in the settlement, which was announced yesterday.
Pending action by the Supreme Court over interpretations of an earlier BP settlement with businesses also comes into play.
Joe Rice, of the law firm Motley Rice, which has been working for the plaintiffs, doesn't see those as major barriers to the settlement.
"They're not extremely complicated pieces," said Rice. "Whereas the litigation would be extremely complicated."
The settlement involves commercial or subsistence fishermen or hunters whose catches were affected by the spill, and businesses and property owners, including local government entities, who had property touched by the oil. They would be able to collect punitive damages from Halliburton through a fund to be administered by a court-appointed representative.
The agreement also would settle claims for a separate class of businesses and individuals who were deemed to have causes of action against Halliburton under BP's 2012 settlement with businesses affected by the spill.
Rice said the settlement, if approved by US District Judge Carl Barbier, would settle most major claims against Halliburton, except those filed by state governments affected by the spill.
Halliburton declined comment on the settlement, other than what was in its brief official statement, which noted that the company had a $1.3 billion loss-contingency provision related to the spill litigation.
RBC Capital Markets analyst Kurt Hallead said yesterday that, given Halliburton's loss contingency, the settlement shouldn't have a major effect on profits or losses.
The Deepwater Horizon rig exploded on April 20, 2010, killing 11 workers and spewing millions of gallons into the Gulf of Mexico for months. BP leased the rig from Transocean Ltd. Halliburton was in charge of sealing the completed well with cement.
BP issued a statement saying yesterday's settlement shows that the explosion and spill was the responsibility of multiple parties.
