Shares in BP gain 1.2 percent, providing the biggest boost to a flatFTSE 100 index with traders citing a positive read-across from asettlement between rig contractor Transocean and the U.S. Department of Justicerelating to BP's massive Gulf of Mexico oil spill. The oil firm added over 5 points alone to the blue-chip index, with volumeamong the top five biggest in the index, at nearly 27 percent of its 90-daydaily average, compared with 11 percent overall for the FTSE 100 index. Switzerland-based rig contractor Transocean (RIG) has agreed to paya lower-than-expected $1.4 billion to settle U.S. government charges over the2010 oil spill, and the firm admitted that its crew on the Deepwater Horizon rigin the Macondo field was partly responsible for the disaster. BP agreed in November to a DoJ settlement of its own worth $4.5 billion,including the largest criminal fine ever at $1.256 billion. Attention now turns to any possible settlements ahead of a Macondo-relatedtrial due to start on February 25 in New Orleans, including for Clean Water Actviolations that may cost BP $21 billion if it is found grossly negligent. Exane BNP Paribas says it believes that the Transocean settlement could helpto bring BP and the U.S. authorities closer to a settlement ahead of the trial. "Crucially, under the agreement, RIG has pleaded guilty to a singlemisdemeanour violation of the Clean Water Act for negligent discharge of oil.Given the proven multi-causal/multi-party nature of the incident, we believethat it could be difficult to pursue a "gross negligence" case against BP whenthe main contractor at the well is simply pleading guilty to "negligence," theFrench bank says in a note, reiterating its "outperform" rating on BP. "We continue to see BP as a key restructuring story in the Oils space with acompelling valuation. The gradual removal of the uncertainties surrounding thecompany should help narrow the valuation discount and refocus investors'attention on the operational improvement of BP," Exane BNP Paribas adds. Reuters messaging rm://jon.hopkins.thomsonreuters.com@reuters.net