BP spill cases head to court as Shell counts cost
Published: Jul 29, 2010 23:05 Updated: Mar 8, 2011 20:01
LONDON/WILMINGTON, Delaware: The tide of lawsuits unleashed by BP's oil spill in the Gulf of Mexico breaks into an Idaho courtroom on Thursday, just as the company's rivals are counting the cost of a ban on offshore drilling.
Attorneys hoping to lead the legal fight against BP are set to descend on Boise, Idaho, to address a special judicial panel considering how to bring order to the hundreds of civil lawsuits spawned by the spill after a rig explosion on April 20.
"There will be more lawyers in that courtroom than exist in the entire city of Boise put together," Mark Lanier, a Houston-based lawyer who plans to attend the hearing, joked this week. "It's going to be a circus."
Seven US federal judges will convene more than 2,000 miles from the Gulf's oil-smudged shores to consider which US court, or courts, should oversee hundreds of spill-related suits by injured rig workers, fishermen, investors and property owners.
Potentially adding its name to the line of claimants, Royal Dutch Shell Plc idled seven rigs and took a $56 million charge related to the drilling ban on Thursday. Saying the ban would reduce its production by almost 3 million barrels this year, the company did not rule out reclaiming the cash from BP.
Shell, one of the biggest oil producers in the Gulf of Mexico, said it had idled rigs rather than move them elsewhere because the ban's six-month duration meant it was not profitable to redeploy them to other areas.
The environmental havoc wreaked by the explosion that killed 11 workers could take years to reverse. The worst offshore oil spill in US history has wrecked the Gulf's fishing and tourism industries.
A temporary cap has halted the gusher a mile below the sea's surface while crews try to plug the well for good next week.
The disaster has posed a huge challenge for US President Barack Obama, whose administration has tried to halt deep-sea oil drilling until the causes of the BP spill are clear.
A US court overturned a six-month moratorium imposed after the spill but the government is fighting to instate a new one.
Reporting second-quarter profits — which doubled from a year ago — Dutch-based Shell said it expected to take another charge related to the drilling moratorium in the third quarter, although in some cases rig owners such as Transocean and Noble Corp. were bearing the lion's share of the costs.
BP, which has created a $20 billion fund to compensate companies and individuals affected by the spill, declined comment on compensating Shell although executives at the London-based group believe it is not liable for damages resulting from the ban.
Like BP, Shell said it was seeking to sell assets — but in Shell's case these would come as an exit from low-margin businesses. BP is seeking the funds to help pay spill costs.
Planning to hive off $30 billion of assets, BP pushed ahead to sell assets in Vietnam, Colombia and Venezuela. It agreed a $7 billion sale of oil and gas fields to Apache Corp. last week and has hired advisers to sell assets in Colombia and Vietnam, according to separate sources.
