Transocean Not Responsible for Fluids Coming from Well

Deepwater Horizon Gulf of Mexico Oil Spill

WASHINGTON (Dow Jones Newswires), June 16, 2010

Transocean chief executive Steven Newman said his company is not responsible for "fluids emanating from the well," attempting to define a limited role for his company as the costs of cleaning up the Deepwater Horizon spill continue to mount.

While testifying before a hearing of a U.S. Senate Homeland Security committee panel, Newman said the Oil Pollution Act says his company is responsible "for fluids originating from the rig above or below the water line, but not for fluids emanating from the well."

When it becomes clear what types of liabilities are "allocated to the rig," which Transocean owned, Newman said the company will work with the National Pollution Funds Center to pay legitimate claims.

Newman also said his company served as a subcontractor--"subordinate to BP"--and that he viewed BP, Anadarko and MOEX Offshore as "well owners or partners of the well owner."

Newman's statements mark an attempt to stake out a relatively narrow role for his company as spill-related costs quickly rise. On Wednesday, BP agreed to set aside $20 billion for an escrow account to address clean-up costs and damages, and Sen. John McCain (R., Ariz.) said the government was about to send BP an invoice for $50 million.

With nearly half a dozen companies involved in the Deepwater Horizon project, experts have said the companies will inevitably engage in lengthy legal battles to determine who is responsible for paying what.

An executive from BP, however, declined to debate Transocean's views, at least in public.

"Our view is that there will be plenty of time to sort the [liabilities] out," said Darryl Willis, vice president of resources at BP America.

Given the massive costs associated with the spill, McCain said, "I think [the division of costs] should be sorted out fairly quickly."

Copyright (c) 2010 Dow Jones & Company, Inc.

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