As a civil trial over the Gulf of Mexico oil spill continues in New Orleans, British oil giant BP has gotten a bit of good news from a federal appeals court.
The 5th U.S. Circuit Court of Appeals has reversed a ruling by U.S. District Judge Carl Barbier, the presiding judge in the trial, and said that BP can tap into insurance policies held by rig owner Transocean that provided for at least $750 million in coverage.
BP had sought access to the money to help cover its pollution-related liabilities deriving from the worst offshore oil spill in U.S. history. It asserted that it should be considered an additional insured party on Transocean’s policies because of their contract involving the Deepwater Horizon rig and Macondo well project. Barbier denied the request, and BP appealed to the 5th Circuit.
“Applying Texas law, especially as clarified since the district court’s decision, we find that the umbrella insurance policy— not the indemnity provisions of Transocean’s and BP’s contract — controls the extent to which BP is covered for its operations under the drilling contract,” the appeals court said in an order entered late Friday. “Because we find this policy imposes no relevant limitations upon the extent to which BP is covered, we reverse the judgment of the district court and remand the case for entry of an appropriate judgment in accordance with this opinion.”
At the trial, BP faces the potential of having to pay billions of dollars more in damages and fines related to the April 20, 2010 disaster off Louisiana. BP owned the well the blew out and was leasing from Transocean the rig that exploded, killing 11 workers.
Testimony in the trial is set to resume Monday.
Read ongoing FuelFix coverage of the Gulf of Mexico oil spill civil trial: