Halliburton has agreed to pay $1.1 billion US to settle most of the claims against the company for its role in the devastating oil spill in the Gulf of Mexico after the Deepwater Horizon oil rig exploded in 2010.
The infrastructure conglomerate was contracted to handle the cement operations on BP's rig when the drilling hole blew in April 2010, killing 11 workers and spilling millions of barrels of oil into the Gulf.
The company had previously estimated it would end up paying about $1.3 billion related to its role in the disaster. BP's settlement in 2012 for its role included provisions that established Halliburton would end up paying a certain percentage of those costs.
The money will be paid into a trust until all appeals have been resolved in three instalments over the next two years.
The settlement involves commercial or subsistence fishermen or hunters whose catches were affected by the spill, and businesses and property owners, including local government entities, who had property touched by the oil. They would be able to collect punitive damages from Halliburton through a fund to be administered by a court-appointed representative.
The agreement also would settle claims for a separate class of businesses and individuals who were deemed to have causes of action against Halliburton under BP's 2012 settlement with businesses affected by the spill.
An attorney for the plaintiffs, Joe Rice of Motley Rice, said the settlement, if approved by U.S. District Judge Carl Barbier, would settle most major claims against Halliburton, except those filed by state governments affected by the spill.
Halliburton declined comment on the settlement, other than what was in its brief official statement, which noted that the company had a $1.3 billion loss-contingency provision related to the spill litigation.
RBC Capital Markets analyst Kurt Hallead said Tuesday that, given Halliburton's loss contingency, the settlement shouldn't have a major effect on profits or losses.
BP issued a statement saying Tuesday's settlement shows that the explosion and spill was the responsibility of multiple parties.
"This settlement marks the very first time — despite three years of official investigations and litigation implicating the company — that Halliburton has acknowledged that it played a role in the accident," said the emailed statement from BP spokesman Geoff Morrell.
Halliburton shares fell 12 cents Tuesday to close at $67.49.