Halliburton, North America's top oilfield services provider, said it reached a $1.1 billion settlement for a majority of claims related to its role in BP oil spill in the Gulf of Mexico in 2010, according to The Associated Press.
The settlement, which includes legal fees, is subject to approval by the U.S. District Court for the Eastern District of Louisiana, Halliburton said, the AP reported.
The amount, to be paid in three installments over the next two years, will be put into a trust until all appeals are resolved, the company said, according to the AP.
"We think this is a smart move by Halliburton," said Stewart Glickman, an equity analyst at S&P Capital IQ, the AP reported. "While state claims by Louisiana and Alabama remain, we think this trims legal overhang."
The Macondo well blowout and rig explosion in April 2010 killed 11 people and spilled millions of barrels of oil for 87 days after the blast, according to the AP.
The settlement protects Halliburton from certain punitive damages if the court were to rule later that the company had been negligent or 'grossly negligent' for its role in the blowout, Chief Financial Officer Mark McCollum said, the AP reported.
A decision is awaited from U.S. District Judge Carl Barbier in New Orleans ascertaining the extent of negligence of BP, Halliburton and rig contractor Transocean, according to the AP.
Transocean agreed last year to pay $1.4 billion to settle U.S. government charges for its role in the disaster, the AP reported. BP, which also faces potential fines under the Clean Water Act in the United States, has so far paid about $28 billion.
"BP has claims against us for contribution for their exposure under the Clean Water Act," McCollum said at the Barclays CEO energy-power conference on Tuesday, according to the AP. "We do not think that stands the legal test because we are not under maritime laws."
Halliburton provided cementing services for BP at the well, including the placement of "centralizers" that help stabilize the well bore during cementing, the AP reported. The company had earlier blamed BP's decision to use only six centralizers, to save "time and money," for the blowout.
