THE owner of the oil rig that exploded in the Gulf of Mexico, killing 11 people and causing a giant slick, has made a $270m (£182m) profit from insurance payouts for the disaster.
The revelation by Transocean, the world’s biggest offshore driller, will add to the political storm over the disaster. The company was hired by BP to drill the well.
The “accounting gain” arose because the $560m insurance policy Transocean took out on its Deepwater Horizon rig was greater than the value of the rig itself. Transocean has already received a cash payment of $401m with the rest due in the next few weeks.
The windfall, revealed in a conference call with analysts, will more than cover the $200m that Transocean expects to pay to survivors and their families and for higher insurance costs.
Talk about perverse incentives! Question for some bright journalist:
Does Transocean insure all its rigs for more than they're worth, or only the ones it thinks are most likely to blow because BP is managing them?
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The bigger question: Did Transocean cover up
their culpability for the accident? Did they fail to commit due diligence about safety requirements? Will their insurer and reinsurer pursue subrogation (i.e. Sue Their Ass Off, to Recoup) against Halliburton, BP, et al.?
The news to follow will be the lawsuits to come -- Like those after 9/11, before they are quashed in favor of gagged private settlements, the legal action will tell the story.