Halliburton 2013 Annual Report Download - page 73

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On December 15, 2010, the DOJ filed a civil action seeking damages and injunctive relief against BP Exploration,
Anadarko Petroleum Corporation and Anadarko E&P Company LP (together, Anadarko), which had an approximate 25%
interest in the Macondo well, certain subsidiaries of Transocean Ltd., and others for violations of the CWA and the OPA. The
DOJ’s complaint seeks an action declaring that the defendants are strictly liable under the CWA as a result of harmful
discharges of oil into the Gulf of Mexico and upon United States shorelines as a result of the Macondo well incident. The
complaint also seeks an action declaring that the defendants are strictly liable under the OPA for the discharge of oil that has
resulted in, among other things, injury to, loss of, loss of use of, or destruction of natural resources and resource services in and
around the Gulf of Mexico and the adjoining United States shorelines and resulting in removal costs and damages to the United
States far exceeding $75 million. BP Exploration has been designated, and has accepted the designation, as a responsible party
for the pollution under the CWA and the OPA. Others have also been named as responsible parties, and all responsible parties
may be held jointly and severally liable for any damages under the OPA. A responsible party may make a claim for contribution
against any other responsible party or against third parties it alleges contributed to or caused the oil spill. In connection with the
proceedings discussed below under “Litigation,” in April 2011 BP Exploration filed a claim against us for equitable
contribution with respect to liabilities incurred by BP Exploration under the OPA or another law, which subsequent court filings
have indicated may include the CWA, and requested a judgment that the DOJ assert its claims for OPA financial liability
directly against us. We filed a motion to dismiss BP Exploration’s claim, and that motion is pending. In July 2013, we also filed
a motion for summary judgment requesting a court order that we are not liable to BP or Transocean for equitable
indemnification or contribution with regard to any CWA fines and penalties that have been assessed or may be assessed against
BP or Transocean. That motion is also pending.
We were not named as a responsible party under the CWA or the OPA in the DOJ civil action, and we do not believe
we are a responsible party under the CWA or the OPA. While we were not included in the DOJ’s civil complaint, there can be
no assurance that federal governmental authorities will not bring a civil action against us under the CWA, the OPA, and/or other
statutes or regulations.
In July 2013, we reached an agreement with the DOJ to conclude the federal government's criminal investigation of us
in relation to the Macondo well incident. Pursuant to a cooperation guilty plea agreement, Halliburton Energy Services, Inc.,
our wholly owned subsidiary (HESI), agreed to plead guilty to one misdemeanor violation of federal law concerning the
deletion of certain computer files created after the occurrence of the Macondo well incident. Pursuant to the plea agreement,
HESI agreed to pay a criminal fine of $0.2 million within five days of sentencing and agreed to three years' probation. The DOJ
has agreed that it will not pursue further criminal prosecution of us (including our subsidiaries) for any conduct relating to or
arising out of the Macondo well incident. We have agreed to continue to cooperate with the DOJ in any ongoing investigation
related to or arising from the incident. In September 2013, our guilty plea was entered and approved by a federal district court
judge on the terms and conditions of the plea agreement, and the DOJ closed its criminal investigation of us in relation to the
Macondo well incident.
In November 2012, BP announced that it reached an agreement with the DOJ to resolve all federal criminal charges
against it stemming from the Macondo well incident. BP agreed to plead guilty to 14 criminal charges, with 13 of those charges
based on the negligent misinterpretation of the negative-pressure test conducted on the Deepwater Horizon. BP also agreed to
pay $4.0 billion, including approximately $1.3 billion in criminal fines, to take actions to further enhance the safety of drilling
operations in the Gulf of Mexico, to a term of five years' probation, and to the appointment of two monitors with four-year
terms, one relating to process safety and risk management procedures concerning deepwater drilling in the Gulf of Mexico and
one relating to the improvement, implementation, and enforcement of BP's code of conduct.
In January 2013, Transocean announced that it reached an agreement with the DOJ to resolve certain claims for civil
penalties and potential criminal claims against it arising from the Macondo well incident. Transocean agreed to plead guilty to
one misdemeanor violation of the CWA for negligent discharge of oil into the Gulf of Mexico, to pay $1.0 billion in CWA
penalties and $400 million in fines and recoveries, to implement certain measures to prevent a recurrence of an uncontrolled
discharge of hydrocarbons, and to a term of five years' probation.
Litigation. Since April 21, 2010, plaintiffs have been filing lawsuits relating to the Macondo well incident. Generally,
those lawsuits allege either (1) damages arising from the oil spill pollution and contamination (e.g., diminution of property
value, lost tax revenue, lost business revenue, lost tourist dollars, inability to engage in recreational or commercial activities) or
(2) wrongful death or personal injuries. We are named along with other unaffiliated defendants in more than 1,800 complaints,
most of which are alleged class actions, involving pollution damage claims and at least eight personal injury lawsuits involving
four decedents and at least 10 allegedly injured persons who were on the drilling rig at the time of the incident. At least six
additional lawsuits naming us and others relate to alleged personal injuries sustained by those responding to the explosion and
oil spill.
The pollution complaints generally allege, among other things, negligence and gross negligence, property damages,
taking of protected species, and potential economic losses as a result of environmental pollution, and generally seek awards of
unspecified economic, compensatory, and punitive damages, as well as injunctive relief. Plaintiffs in these pollution cases have
brought suit under various legal provisions, including the OPA, the CWA, The Migratory Bird Treaty Act of 1918, the ESA, the
OCSLA, the Longshoremen and Harbor Workers Compensation Act, general maritime law, state common law, and various state