BP Ordered to Reimburse Halliburton for Damages

BP Plc (NYSE:BP) will be required to pay for a portion of any direct damage claims awarded against Halliburton Co. (NYSE:HAL) for the $40 billion in economic losses and cleanup expenses resulting from the 2010 Deepwater Horizon oil-well explosion and its consequent Gulf of Mexico oil spill, a New Orleans court decided today, Bloomberg said.

U.S. District Judge Carl Barbier ruled that under its drilling contract, London-based BP has to repay Halliburton for compensatory damage claims. In April, the British company filed suit against Halliburton, which provided cementing services for the project, to regain part of any damages and costs from the spill.

Barbier said BP is not responsible for punitive damages or any Clean Water Act civil fines against the Houston-based Halliburton, according to Bloomberg.

The judge has not yet ruled on crucial accusations by BP that Halliburton committed fraud by not revealing data about its cement tests. If the decision goes against Halliburton on this matter, the company may be required to pay damages.

“Halliburton denies that it committed fraud, but also argues that BP’s allegations are merely breach of contract claims cloaked as fraud,” said Barbier, who also noted that not meeting contractual obligations is not fraud.

Under an earlier ruling, BP must compensate Transocean Ltd. (NYSE:RIG), the the owner of the oil rig that exploded and sank.