According to a posting from the Buzbee Law firm, Transocean filed papers in federal court in Houston seeking to limit their liability to the value of the sunken vessel, the semi-submersible oil rig Deepwater Horizon, which Transocean values at only $27 million;
ALERT--TRANSOCEAN SEEKS TO LIMIT ITS LIABILITY: Today, The Buzbee Law Firm was contacted by a Houston defense firm who indicated that Transocean will seek to limit its liability from the explosion to only $27 million. The Buzbee Law Firm has confirmed that the papers to were indeed filed in Houston Federal Court, and will be handled by Federal Judge Ellison.
This ridiculous legal maneuver is an attempt by Transocean to take advantage of a little known, arcane law that allows a ship owner to limit its liability in a lawsuit to the value of the vessel--after the accident. In this case, according to Transocean, the rig on the bottom of the ocean has zero value. However, the contracts that Transocean has with BP is worth about $27 million. Thus, Transocean's legal papers claim that regardless how many were injured or killed, Transocean, at the end of the day, is only responsible for damages of $27 million total--even though we know that less than two weeks ago Transocean received more than $400 million from its own insurance company.
Buzbee also lays out the likely events that caused the explosion;
Causes of the Explosion:
Although it is too early to know for sure, it is already clear that a series of human errors and mechanical failure led to the explosion. Some of the possible causes include:
Cementing:
Cementing is a process that is supposed to prevent oil and natural gas from escaping by filling gaps between the outside of the well pipe and the inside of the hole bored into the ocean floor. Cement, pumped down the well from the drilling rig, is also used to plug wells after they have been abandoned or when drilling has finished but production hasn't begun.
In the case of the Deepwater Horizon, workers had finished pumping cement to fill the space between the pipe and the sides of the hole and had begun temporarily plugging the well with cement; the cement job was finished, and pressure testing occurred. Despite there being problems with the pressure testing, Transocean and BP chose to continue displacing the mud, as if the cement job had been successful. This was a grave error. For cementing to be effective, the right mix must be used, and the cement must have time to harden. Naturally, the decision to displace the cement is ultimately made by the company--in this case, BP. Because BP was paying $500,000 daily to lease the rig, naturally there is incentive to rush the job. If the cement mix was inadequate, or if insufficient time was given for it to harden, Halliburton (the company that performed the cementing) and BP (the company for whom Transocean was working) will have major liability.
Blow Out Preventor:
A blowout preventer (BOP) is a large valve that can seal off at the surface wellhead a well being drilled or worked over. During drilling or well interventions, the valve may be closed if pressure from an underground formation causes fluids such as oil or natural gas to enter the wellbore and threaten the rig. By closing this valve (usually operated remotely via hydraulic actuators), the drilling crew can prevent undesired fluid flow, thus regaining control of the wellbore. Once this is accomplished, often the drilling mud density within the hole can be increased until adequate fluid pressure is placed on the influx zone, and the BOP can be opened for operations to resume. In this case, we know that the blow out preventer failed to operate. We also know that the BOP had been altered, but BP instructed and paid for the modifications. Because this safety device failed, the manufacturer (Cameron out of Houston, Texas) will likely have major liability, as will BP.
Drilling Operations--Human Error:
The Deepwater Horizon was owned by Transocean, which is headquartered in Houston. The Deepwater Horizon is what is considered a "vessel" under admiralty law. All of the individuals aboard the Deepwater Horizon are considered Jones Act seaman, protected by federal law--meaning that Transocean owes a duty to maintain a safe workplace and a "seaworthy vessel," and other federal duties. According to eyewitnesses, prior to the pressure "kick," no alarms sounded. This lack of warning is likely one of the reasons individuals were not able to evacuate the rig floor prior to the ignition. Other anecdotal evidence is being investigated. Under admiralty law, a vessel that sinks is presumed unseaworthy, meaning the rig operator is liable for the injuries caused. Obviously, Transocean faces major liability for the explosion and ultimate sinking of the Deepwater Horizon. Transocean will also face liability for the resulting oil spill.
BP Exploration and Production:
BP leased the Deepwater Horizon from Transocean, and it was Transocean personnel who were drilling BP's field. BP as the "company" had ultimate control over the rig. Under federal law, BP is responsible for its own negligent decision made with regard to cementing, geologic information, and drilling, and, with regard to any pollution that occurs, is responsible regardless whether BP was negligent or not. In light of the human and environmental costs, BP will face major liability for the explosion. In light of BP's history of problems both offshore and in the refinery context, BP's conduct will be under the spotlight for some time to come.
Sources:
http://www.txattorneys.com/...