Thursday, August 5, 2010

Transocean contract says all blowout costs fall to BP (RIG; BP' APC)

Don't that beat all?
From NewsWatch: Energy:
Transocean released a copy of its contract with BP for the use of the Deepwater Horizon rig (see below), which seems to show much of the responsibility for spill-related issues falls to BP.
In the document all references to "company" mean BP and "contractor" means Transocean.
BP should pay for all the well-control costs, according to the document:
(c) Blowout and cratering
In the event that any WELL shall blowout or crater from any cause, including, but not limited to, the negligence or breach of duty (statutory, contractual or otherwise) of the CONTRACTOR GROUP, COMPANY shall be responsible for and release, indemnify and hold harmless CONTRACTOR GROUP for all CLAIMS resulting therefrom, and shall bear the entire cost and expense of, killing the WELL or otherwise bringing the WELL under control.
Transocean is responsible for spills on the surface of things like fuel from the rig, but BP is on the hook for pollution from the well:
(ii) Blow-out, cratering, seepage or uncontrolled release of hydrocarbons
Except as provided for under the provisions of Sub-article 21.5 (b) (i) but subject always to Sub-article 21.5 (b) (iv), COMPANY shall assume all responsibility for, including control, clean-up and removal of and shall release, defend, indemnify and hold harmless CONTRACTOR GROUP from all CLAIMS, howsoever caused and arising in relation to pollution or contamination which may result from fire, blow-out, cratering, seepage, or any other uncontrolled flow of oil, gas, wastes or other substance from any WELL arising out of the CONTRACT.