Attorney General hints BP's partners may face criminal investigation

Transocean, the Swiss owner of the doomed Gulf of Mexico rig, faces the wrath of Americans as the cost of oil catastrophe reaches $3bn

David Usborne
Sunday 11 July 2010 00:00
Comments

Companies partnered with BP in developing the crippled Macondo well in the Gulf of Mexico could possibly also be targeted in the sweeping criminal investigation under way in Washington, Eric Holder, the US Attorney General, will say this morning.

Any switch of attention to the other players in the disaster, likely to include Transocean, owner of the doomed rig, may offer partial relief for BP which so far has been alone in taking the wrath of the White House and shouldering the costs of the catastrophe, which last week topped $3bn (£2bn).

"There are a variety of entities and a variety of people who are the subjects of that investigation," Mr Holder says of his department's probe, in an interview with Bob Schieffer of CBS, to be broadcast in the US today. "For people to conclude that BP is the focus of this investigation might not be correct."

Transocean, based in Switzerland, saw its shares rise by more than 4 per cent on Friday at the news that a Louisiana judge had ruled against a request by the Obama administration to reinstate a six-month ban on deep-ocean drilling pending the end of the BP investigation.

But Transocean, which has grown in recent years, out of a series of mergers and acquisitions, to become the world's largest deepwater driller, was on the defensive last week about its broader record, both as a corporate entity that pays its taxes and over worker safety and human rights.

The company, already under attack from leading US senators over plans to pay out $1bn in dividends, was forced to react to a New York Times article detailing numerous recent Transocean controversies, including an ongoing tax evasion investigation in Norway, the loss of eight lives off the coast of Scotland when a support vessel capsized, and allegations by human rights groups of business being conducted in countries blacklisted by the US.

While not responding directly to the article, the company issued a statement saying it was acting within the law in Myanmar, where as recently as this spring it was allegedly involved in a drilling site where another of the stakeholders was identified as a Singaporean business that itself has been linked by US officials to money launderers for the Myanmar military junta.

It emerged, meanwhile, that Transocean had acknowledged in filings with the US financial authorities that, in the past, some of its equipment has been forwarded through Iran and that it once had a stake in a Syrian company. Both Syria and Iran have been subjected to US business sanctions.

As for investigations of possible tax evasion in Norway, the company has said it could result in fines and assessments in excess of $800m.

Transocean has publicly blamed BP for the Gulf blowout, even though there were far more of its people on the rig, the Deepwater Horizon, when it exploded on 20 April, than from BP. But pressure on the company has been growing on Capitol Hill. Late last month, senators warned it against moving forward with dividend payments, though there is little sign of the company heeding this.

"Many things remain unclear about what happened on the Deepwater Horizon," the senators wrote in a letter. "Before your company begins to reward its shareholders, we urge you to follow BP's example by withholding further shareholder rewards until investigations of this are complete."

At the end of June, Senator Max Baucus revealed he was looking into whether Transocean had exploited loopholes in the US tax system by moving its corporate headquarters to Switzerland. Previously, the company was based in Houston, Texas. Then it moved its nameplate, but few of its executives, to the Cayman Islands. From there, it went to Zurich.

"Transocean's questionable business practices may be at fault for costing lives and livelihoods on the Gulf Coast, and now there are questions regarding its tax practices as well," the senator said. "Hardworking Americans pull their weight by paying the taxes they owe every day and American companies must do the same."

BP was also tangling last week with one of its minor partners in the crippled well. The Houston-based Anadarko oil company, which owns 25 per cent of the well, stated it was declining a request from BP that it share some of the clean-up costs.

"We are disappointed they have failed to live up to their obligations," BP spokesman Mark Salt said late on Friday. "Anadarko's refusal to pay its share will in no way affect BP's commitment to stop the leak, clean up the spill, and pay all legitimate claims as quickly as possible."

Engineers for BP were meanwhile preparing to take the current containment cap off the gushing well and replace it with one with a better seal. The company is accelerating efforts to complete the first of two relief wells in the hope of stopping the leak before the end of July.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in