[StBernard] BP Not Covered for Spill by Transocean's Insurance

[Westley Annis]

BP Not Covered for Spill by Transocean's Insurance

BP Plc will not be able to use Transocean Ltd.'s insurance coverage to pay
costs related to the 2010 Gulf of Mexico oil spill, a judge ruled this
morning.

Insurance Networking News, November 16, 2011

Pat Speer
In its second setback in less than a week, BP Plc learned this morning that
it is not entitled to insurance claims reimbursement from Transocean's
insurance carriers as a result of the 2010 Gulf of Mexico oil spill.

Earlier this week, U.S. District Judge Carl Barbier, who is presiding over
several suits related to the incident, ruled that Alabama and Louisiana can
seek punitive damages from BP and other companies for spill damages, though
he dismissed some of the states' other claims.

Transocean owned the Deepwater Horizon oil rig involved in the 2010 Gulf of
Mexico incident, and BP owned a majority of the Macondo well whose blowout
led to the spill.

Last year, BP filed claims with Transocean's carriers, requesting access to
$750 million in coverage that applied to nine different policies. But
opposition to the claims by Lloyd's of London, other excess underwriters and
Ranger Insurance, Transocean's primary insurer, disputed that coverage. The
insurance disputes by Lloyd's and Ranger are combined with other
spill-related lawsuits in "In Re Oil Spill by the Oil Rig Deepwater Horizon
in the Gulf of Mexico on April 20, 2010, MDL-2179," U.S. District Court,
Eastern District of Louisiana (New Orleans).

The carriers owe no duty to pay claims or defense costs to BP, Judge Barbier
said in New Orleans court.

"The court finds that BP, under the drilling contract, assumed
responsibility for Macondo well oil release pollution liabilities," Barbier
said in a 42-page ruling. "Because Transocean did not assume these
liabilities, there is no additional insurance obligation in favor of BP for
these liabilities."

The Macondo incident, which killed 11 workers and set off the worst ever
offshore oil spill in U.S., was the worst on record. London-based BP, its
partners and contractors have been under fire ever since, with hundreds of
lawsuits pending against them. Judge Barbier is hearing the cases, Reuters
reports. The lawsuits also name as defendants Transocean, the
Switzerland-based owner and operator of the Deepwater Horizon drilling rig
that exploded and sank; Houston-based Halliburton Co., which provided
cementing services to the well; and Cameron International, which provided
blowout-prevention equipment, according to Bloomberg.

BP's minority partners in the well, Anadarko Petroleum Corp. and Mitsui &
Co.'s Moex Offshore LLC unit, were also named in lawsuits. Anadarko and Moex
had joined BP in seeking coverage from Transocean's insurance.