UPDATE 1-U.S. set for BP oil spill trial - attorney general

Tue Feb 28, 2012 4:47pm EST

* Holder says US has strong case in BP trial

* Attorney General says progress made in criminal probe

WASHINGTON Feb 28 (Reuters) - U.S. Attorney General Eric Holder said his team is ready to proceed with a civil trial next week to determine responsibility for the Gulf of Mexico oil spill from the BP Plc well, despite settlement talks to resolve some of the matters.

The Obama administration's criminal probe into the April 20, 2010, explosion that led to the massive spill at the Macondo well and which killed 11 people is also making progress, Holder told a House of Representatives subcommittee.

The civil trial to determine who is responsible for the blowout and related penalties was due to start this week but was delayed until March 5 while BP tries to strike a deal with condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged in what became the worst offshore oil spill in U.S. history.

"We are prepared to go to trial. We were ready to go to trial yesterday," Holder told House lawmakers seeking an update on settlement talks. "We'll see what happens" this week with regard to a possible resolution, he added.

BP has been trying to settle with the federal government and the states that border the Gulf of Mexico over environmental penalties for the spill, but there has been no sign that the parties are close to clinching a deal.

The oil company is potentially facing billions of dollars in fines under environmental laws for the oil spill including for violations of the Clean Water Act, Endangered Species Act and other laws governing natural resources.

"We have a strong case," Holder said. "People, organizations have to be held accountable, responsible for the lives that were disrupted, the economic harm that was inflicted upon people that were innocent, totally innocent."

The Justice Department has been looking also into whether to bring criminal charges related to the disaster that led to some 4.9 million barrels of oil spilling into the gulf.

"I'm satisfied with the progress that we are making, and I would expect within months we will have something to say in that regard as well," Holder said of the criminal case.

BP co-owned the well at the time of the accident with Anadarko Petroleum Corp and Mitsui & Co's MOEX USA unit. Transocean Ltd was drilling the well and Halliburton provided the cementing service for it.

Transocean took a $1 billion charge on Monday related to the 2010 Gulf of Mexico spill, a possible sign it will join a settlement. Its drilling rig, the Deepwater Horizon, sank.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.