BP Share News (BP.)

* Transocean owned doomed rig in 2010 Macondo disaster * Payment less than company set aside, shares jump 7 pct * Settlement still to be reached with plaintiffs * Halliburton still to settle with DoJ; its shares up 1.7pct By David Ingram WASHINGTON, Jan 3 (Reuters) - Offshore rig contractorTransocean Ltd has agreed to pay $1.4 billion to settleU.S. government charges arising from BP Plc's massive oilspill in the Gulf of Mexico in 2010. The settlement unveiled on Thursday by the Department ofJustice includes $1 billion in civil penalties and $400 millionin criminal penalties. The company had set aside $1.95 billionin potential losses related to the Macondo well disaster,including $1.5 billion for its anticipated DoJ settlement. Still to be reached is a Transocean settlement with theMacondo plaintiffs steering committee that represents more than100,000 individuals and business owners claiming economic andmedical damages from the spill. UBS analyst Angie Sedita said the ultimate cost of Macondoto Transocean could end up being more than $4 billion, includinga deal with the plaintiffs that may take "years to resolve."Last year, BP reached an estimated $7.8 billion deal to resolveits liability with the plaintiffs. Shares of Transocean were up 7 percent at $49.46 inafternoon trading on the New York Stock Exchange, while the costof insuring Transocean debt fell sharply. "The bottom line to me is they now can put away the bigblack cloud that has been hanging over them," said Phil Weiss,an oil analyst at Argus. Barclays Capital said the DoJ settlement was below its $2.5billion estimate and believed the resulting clarity would leadto a "significant valuation recalibration" for the company.Barclays noted that among the Macondo contractors, Halliburton remained the only one that had not yet settled.Halliburton shares were up 1.7 percent on Thursday. A Transocean spokesman was unavailable to discuss remainingMacondo liabilities. Transocean said the DoJ settlement excluded potential claimsrelated to a separate damages assessment, but it noted that onecourt had found Transocean was not liable for damages caused bythe Macondo well below the surface of the water. Switzerland-based Transocean owned the Deepwater Horizon rigthat was drilling a mile-deep well when a surge of methane gassparked an explosion on April 20, 2010, which killed 11 men. The accident led to months of a U.S. deepwater drilling banand intense scrutiny of the offshore drilling industry, which isnow booming again despite lingering public concerns. Of the $400 million in criminal fines, $150 million willhelp protect the Gulf of Mexico environment, while another $150million will fund spill prevention and response efforts there,the DoJ said. Transocean must also implement court-enforceablemeasures to improve safety and emergency response on U.S. rigs. "Today's announced settlement will aid the Gulf region'srecovery from the Deepwater Horizon oil spill and requireTransocean to take important steps that will help guard againstsuch incidents happening in the future," Acting AssociateAttorney General Tony West said in a statement. BP and Transocean had "multiple safety management systemdeficiencies that contributed to the Macondo incident," andneither had adequate safety rules, according to a July 2012report from the U.S. Chemical Safety Board. Transocean and BP disagreed on who was in charge ofinterpreting what is known as a negative pressure test, whichcould have alerted workers to the well's instability. The DoJ said that in agreeing to plead guilty to violatingthe Clean Water Act, Transocean admitted that members of itscrew, acting at BP's direction, were negligent in failing fullyto investigate indications that the Macondo well was not secure. BP in November agreed to a settlement with the U.S.government worth $4.5 billion, including the largest criminalfine ever at $1.256 billion. The London-based oil company alsoagreed to plead guilty to obstruction of Congress, a felony. New York-traded shares of BP were up 1.7 percent on Thursdayafternoon.