NEW ORLEANS Halliburton, BP's cementing contractor on the Deepwater Horizon oil rig, has agreed to a capped $1.1 billion settlement with private plaintiffs damaged by the massive 2010 oil spill.
The agreement announced Tuesday by both BP and plaintiffs' attorneys was the result of hard-fought negotiations, and Halliburton still doesn't accept fault for any failures of the cement lining in BP's well.
But the lead plaintiffs' attorney in the case is calling it welcome good news for claimants who have met with constant delays in the main BP settlement and nothing from rig owner Transocean to cover its share of the damages suffered by fishermen, coastal businesses and others.
'It's nice to see some extra compensation coming to these people who have been suffering and waiting and kind of stymied by BP, even though their claims were settled two years ago,' said Steve Herman, co-lead counsel for the class-action.
The Halliburton deal actually creates two new classes of claimants. One is basically the same claimants in the BP economic settlement as Halliburton agreed to cover its share of damages under that settlement.
The other class created by the Halliburton settlement in open to any commercial fisherman or landowner whose property was actually touched by BP's spilled oil. Interestingly, Halliburton agreed to pay those claimants, whether they are part of the BP settlement or not, for punitive damages.
How those punitive will be calculated and distributed among the class members, and how much of the $1.1 billion will go to the two classes of plaintiffs, has yet to be decided.
Herman said U.S. District Judge Carl Barbier will have to appoint two new independent administrators to handle the claims payments, just as he did for the BP economic and medical claims settlements.
The Halliburton settlement will also have to go through a review and approval process by the court, which Herman expects to happen late this year or early in 2015.
Even if there are no long appeals or objections to deal with, a new bureaucracy will have be set up for each settlement class, meaning it could be years before any Halliburton payments are made. In the meantime, the $1.1 billion will sit protected in a trust.
Federal investigators blamed Halliburton for some of what caused the worst oil spill in U.S. history April 20, 2010. The contractor had poured nitrogen-infused cement into BP's Macondo well, about 50 miles off Venice, but never gave BP key stability readings for the new type of cement before the cement job was done.
At the same time, Halliburton had recommended using 21 devices called 'centralizers' to steady the well's tube-shaped walls to ensure an even distribution of cement, which bonds the metal walls to the jagged earthen well bore. A Halliburton report just days before the blowout warned of a high risk of gas flow into the well if fewer centralizers were used. BP decided to use just six of the devices.
BP supervisors testified that they never read the Halliburton warnings until it was too late. High-pressure gas did get into the well and shot up to the rig above, igniting in fireballs, killing 11 men and setting off 87 days of oil gushing into the Gulf of Mexico.
But Halliburton pleaded guilty to a criminal charge of destroying evidence when federal investigators discovered the company had destroyed internal documents that showed the number of centralizers wouldn't have mattered.