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BP Seeks Access to $750m Transocean Insurance

BP Seeks Access to $750m Transocean InsuranceBP Seeks Access to $750m Transocean Insurance

BP Plc, which already has paid more than $28 billion for the 2010 Gulf of Mexico oil spill, seeks to get a $750 million chunk of that back by convincing a Texas court that a missing comma may give the oil company access to Transocean Ltd. (RIG)’s insurance policies on the Deepwater Horizon.

BP filed claims with Transocean’s carriers in 2010, seeking to tap a $50 million primary policy issued by Ranger Insurance and $700 million in excess coverage from Lloyd’s of London and other underwriters. The carriers asked the court overseeing the spill litigation to rule that BP wasn’t entitled to unlimited access to Transocean’s insurance, Bloomberg reported.

The maneuvering over insurance coverage comes as a watershed ruling by a US judge may push the final cost to BP for the spill to more than $50 billion, wiping out years of profits and highlighting the risks of drilling as the industry pushes into more dangerous areas such as deeper waters and ice-bound Arctic fields.

BP lost its battle for coverage at a lower court, won reversal on appeal, then saw that victory erased last year as the US Court of Appeals in New Orleans withdrew its original opinion. The appellate panel sent the case to the Texas Supreme Court, which is holding oral arguments today, to determine whether the reversal conflicts with state law.

Energy industry associations representing owners of most of the world’s drilling rigs and insurance syndicates covering global exploration activities are watching the case intently and weighed in with legal arguments of their own, supporting Transocean, according to court filings.

 

Financialtribune.com