Govt Issues Citations to Contractors of Deepwater Horizon Oil Spill

October 14 00:00 2011

New York, October 14 ( – Contractors Halliburton Co and Transocean Ltd involved in the deep water Horizon oil spill, along with rig operator BP PLC have been issued citations by the US government in an unprecedented move. However, legal experts say that although contractors in the oil-service industry will face greater scrutiny from regulators, they have enough liability protection to fight the citations and any subsequent fines.

Previously, rig operators were held responsible for whatever happened in their entire operations. The contractors hired by the operators performed drilling, seismic or cementing operations and their contracts protected them from any liability.

However, after the Deep water Horizon mishap in April 2010, in which 11 people died and tens of billions of dollars were spent in costs following the biggest oil spill in history, BP and the U.S. investigations widely blamed all three companies for the debacle.

Wednesday’s citations by the government have set a precedent for apportioning the blame on contractors and increasing their exposure to civil suits from people claiming damages. However, contractors are preparing to fight the accusations saying that they are fully protected against penalties and losses by their contracts with BP. They said that they intend to appeal.

However, according to Larry Nettles, an environmental attorney, no contract can protect the oil-service contractors from the fine if the court determines that the government has the right to issue a citation.