September 5, 2012 / 7:10 PM / 8 years ago

Transocean sees "elevated rhetoric" from US on Macondo

(Reuters) - Transocean Ltd’s CEO said new court papers from the U.S. Justice Department talking of gross negligence in the Macondo oil spill are merely “elevated rhetoric” stemming from ongoing discussions between all the parties involved.

The U.S. government and BP Plc, operator of the Gulf of Mexico well in 2010 that ruptured and destroyed the Transocean rig drilling it, are engaged in talks to settle civil and potential criminal liability, though neither side will comment on the status of negotiations.

Government lawyers wrote of “gross negligence and willful misconduct” in an August 31 filing in federal court in New Orleans, where the trial is slated for January 2013. A gross negligence finding could nearly quadruple the civil damages owed by BP under the Clean Water Act to $21 billion.

“From my perspective, the underlying claim is not new,” Transocean Chief Executive Steven Newman said at the Barclays CEO Energy/Power Conference in New York on Wednesday. “What’s new is the elevated rhetoric, and I think that represents the ongoing discussions between all the parties.”

Last month, Transocean added a $750 million charge for its own potential Macondo losses to the $1 billion estimated loss it booked for the fourth quarter of 2011.

Newman also said he was confident the offshore contractor would ultimately overturn an operating ban in Brazil last week that followed an oil spill in November 2011 at a well drilled by Chevron Corp with a Transocean rig.

But Newman could not be so certain the appeals process would prevent the injunction from taking effect within 30 days of Transocean being served with it, which he said was imminent. Since 10 of the company’s 127 active rigs are in Brazil, a stoppage would have an earnings impact, he added.

Shares of Transocean were down 3 percent at $46.69 in afternoon trading.

Reporting by Braden Reddall in San Francisco; editing by Carol Bishopric

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