Oil insurance payout of $750 million for Transocean sought by BP

bp oil insurance

The company is attempting to use a technicality to convince a court to permit them access to policies.

BP, which has paid over $28 billion in order to cover the costs of the oil spill disaster in the Gulf of Mexico, which occurred in 2010, is now attempting to receive $750 million of that amount back again by working to convince a court in Texas that it should be able to access oil insurance that covered Transocean Ltd.

BP is hoping that a missing comma would show that it is entitled to access insurance policies on Transocean.

Those oil insurance policies covered Transocean for the Deepwater Horizon rig that exploded and devastated a large section of the Gulf of Mexico. Back in 2010, BP filed claims with the carriers covering Transocean, in an attempt to obtain access to a primary policy for $50 million. That policy had been issued by Ranger Insurance. BP also attempted to obtain access to a policy from Lloyd’s of London and other carriers for $700 million.

This newest attempt to obtain access to the oil insurance coverage follows a new ruling by a federal judge.

bp oil insuranceBP has been making this most recent attempt to seek access to the insurance coverage because a federal judge has recently made a decision that could drive the financial cost of the Gulf of Mexico disaster from Deepwater Horizon up above the $50 billion mark. This decision could cause BP to lose years of profits and further underscores the risks that are associated with drilling as the oil industry takes steps into increasingly deep waters, as well as under the sheets of ice in the fields of the Arctic.

Until now, BP has lost several battles in order to obtain coverage, and in lower courts, it has been stopped from accessing the policies that it is currently seeking in the Texas Supreme Court. It had previously won a temporary victory in obtaining the coverage but the U.S. Court of Appeals in New Orleans opted to withdraw its original opinion, taking away that ending in favor of BP.

At the time that this article was written, the oil insurance access case was before the Texas Supreme Court, for a decision that will determine whether or not the previous reversal is in conflict with the laws of the state.

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