Transocean Ltd. said Wednesday that its contract with oil giant BP PLC for use of the Deepwater Horizon drilling rig leaves it largely protected from lawsuits and claims for damage stemming from a deadly April explosion.
In a regulatory filing with the U.S. Securities and Exchange Commission, Switzerland-based Transocean said its 400-page contract with BP protects it against fines, penalties and other legal damages related to the Deepwater Horizon incident, which could run in the billions of dollars. BP agreed to shoulder much of the legal burden under the contract, according to Transocean.
The Transocean-owned Deepwater Horizon, working for BP, suffered a blowout that killed 11 workers and started the worst offshore oil spill in U.S. history.
The drilling contractor noted that given the size of the bill, BP "may seek to avoid" its contractual obligations. According to Transocean, BP says that it cannot yet conclude that it's responsible for the damages, arguing that "the facts are not sufficiently developed to determine who is responsible."
BP did not respond to requests for comment.
Transocean said that under the contract, it is not indemnified from lawsuits brought by the families of nine Transocean workers who died in the explosion, but it is against two BP workers who died that night.
UBS AG energy analyst Angie Sedita said in a note to investors that she believes the contract "broadly protects" Transocean and notes that the company is indemnified "without limit and without regard to the cause or causes."
