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Vantage sues BP unit over Gulf oil spill costs

9 April 2013

oil

US-based offshore drilling contractor Vantage Drilling has taken legal action against a BP Plc unit, on the grounds that it had to pay an excess of $265.5m in financing costs in relation to the 2010 Gulf of Mexico oil spill.

Vantage claims it had to find last-minute alternative funding for its Platinum Explorer deep-water drilling rig, which was close to completion at a South Korean shipyard, following the blowout of BP's Macondo well, reported Bloomberg.

The company said the subsequent massive oil spill shutdown much of the Gulf in April 2010.

In a filing with the New Orleans federal court on 3 April, Vantage lawyer Richard Mithoff was quoted by the publication as saying: "Vantage's pre-spill financing window slammed shut, bond yields for ultra-deepwater drillship contracting companies such as Vantage spiked, and the post-spill financing terms available to Vantage substantially worsened."

"Vantage claims it had to find last-minute alternative funding for its Platinum Explorer deep-water drilling rig."

As per the filing, the company had to pay the Korean shipyard a $64.2m instalment by 30 July 2010, and an additional $608m on delivery of its deep-water rig during November in the same year, to avoid losing the Platinum Explorer rig. Vantage said that it presented its claim to BP's oil spill settlement administrator, which it subsequently denied.

The Deepwater Horizon Claims Center, which oversees BP's settlement programme, earlier denied 193 spill-related damage claims by companies in the oil and gas industry.

The centre is also said to not be tracking the estimated value for these denied energy-industry claims.

The report was submitted to US District Judge Carl Barbier, who is supervising all litigation for economic and medical injuries resulting from the spill.

Vantage's claim is one of several that are not covered by UK-based BP's $8.5bn settlement for most private-party claims for economic and medical damages in relation to the worst oil spill in US history.

In February 2013, BP faced a new $34bn claim from local and southern state governments in the US, including Louisiana and Mississippi, for financial losses and property damage incurred as a result of the Deepwater Horizon spill in the Gulf of Mexico.

In April 2013, BP lodged an appeal against a court ruling over a settlement for the disaster that will force the company to pay out billions of dollars beyond what it anticipated.


Image: The Deepwater Horizon rig started drilling a well at a water depth of 5,000ft in MC block 252 when it caught fire in April 2010.

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