For its role in the Deepwater Horizon disaster, a subsidiary of Transocean (NYSE:RIG) has agreed to plead guilty to violating the Clean Water Act and to pay $1 billion in civil penalties for violating that act, as well as $400 million in criminal fines and penalties, according to a news release from the Department of Justice.
"Transocean's agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster," said Lanny A. Breuer, Assistant Attorney General for the Justice Department's Criminal Division.
The April 20, 2010, uncontrolled blowout on the Deepwater Horizon oil drilling rig caused explosions and a fire, resulting in the deaths of 11 rig workers and poured the largest oil spill in U.S. history.
According to Transocean, "This resolution will result in the Department of Justice concluding its criminal investigation of Transocean and settling its claims for civil penalties against the company relating to the spill from BP's Macondo well." The company plans to use cash on hand and cash flow from operations to pay the fines over a period of five years.
The subsidiary has agreed to plead guilty to a single misdemeanor violation of the CWA for negligent discharge of oil into the Gulf of Mexico, pertaining to "well monitoring in connection with specific operations during the temporary abandonment procedure on April 20, 2010," according to Transocean.
BP (NYSE:BP), which also faced criminal and civil charges in the disaster, announced in November it would pay $4.5 billion to end charges against it.
Fool contributor Dan Radovsky has no positions in the stocks mentioned above. The Motley Fool owns shares of Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.