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In re Oil Spill by the Oil Rig "Deepwater Horizon"

ELR Citation: 42 ELR 20031
Nos. 2179, (E.D. La., 01/31/2012) (Barbier)

A district court held that BP must indemnify Halliburton Energy Services for third-party compensatory claims related to the Deepwater Horizon disaster under its drilling contract. Specifically, BP is required to indemnify Halliburton for third-party compensatory claims that arise from pollution or contamination that did not originate from the property or equipment of Halliburton located above the surface of the land or water, even if Halliburton's gross negligence caused the pollution. However, BP does not owe Halliburton indemnity to the extent Halliburton is held liable for punitive damages. Nor does BP owe Halliburton indemnity to the extent Halliburton is held liable for civil penalties under the CWA. Whether Halliburton breached the contract, and whether that breach was of a type that would invalidate the indemnity clause, cannot be determined on summary judgment. Likewise, there are material issues of fact that preclude summary judgment as to whether Halliburton made fraudulent statements and fraudulently concealed material information concerning the cement tests it conducted and other matters, and whether BP, relying on these statements, allowed Halliburton to pour the unstable cement slurry that led to the uncontrollable well and blowout.