BP Says Rig Partner Liable For Its Own Punitive Damages

BP said the law and its contract with Halliburton don't permit BP to be held responsible for covering punitive damages ultimately faced by Halliburton.

NEW YORK (AP) -- BP wants to shield itself from having to compensate Halliburton for punitive damages, fines and penalties the cement contractor may face for its role in the deadly 2010 rig explosion and oil spill in the Gulf of Mexico.

Billions of dollars are potentially at stake as a federal trial scheduled for February approaches. The civil trial, which is expected to last eight weeks, is being held to assign shares of fault to the companies involved in the worst offshore oil spill in U.S. history. It also was to determine whether rig owner Transocean can limit what it pays those making claims under maritime law.

London-based BP PLC said in court papers Wednesday the law and its contract with Halliburton don't permit BP to be held responsible for covering punitive damages ultimately faced by Halliburton, which is based in Houston.

The explosion off Louisiana killed 11 rig workers and led to more than 200 million gallons (757 million liters) of oil spewing from a well a mile (two kilometers) beneath the sea, according to government estimates. BP owned the well and was leasing the Deepwater Horizon rig from Swiss-based Transocean Ltd.

BP also said the court should deny Halliburton's request that BP indemnify Halliburton for other costs it has incurred related to the spill. It said the request is premature since the trial hasn't started.

BP has spent considerable legal firepower trying to deflect blame for the disaster.

It has already spent or committed tens of billions of dollars on cleaning up the Gulf and compensating fishermen, condo owners, restaurants and other businesses and individuals harmed by the oil spill. However, that sum could pale in comparison to what it faces depending on court rulings, the outcome of the trial and any fines and penalties ultimately imposed by government agencies.

BP claims every single safety system and device and well control procedure on the Deepwater Horizon rig failed.

BP also has accused Halliburton of fraud for allegedly concealing critical information about cement tests it conducted. An oil well must be cemented properly to avoid blowouts.

BP has argued that a botched cement job led to the Macondo well blowout.

Halliburton, Transocean and other companies involved in the disaster have made counterclaims against BP.

A report issued in September by the U.S. Coast Guard and the agency that regulates offshore drilling concluded that BP bears ultimate responsibility for the disaster. BP has asked the court to keep that report out of the civil trial.

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