Drilling Contracts: Post Macondo Considerations
Abstract
This paper will discuss new issues in drilling contracts following the litigation regarding the BP Macondo well blowout incident. Considering the tens of billions of dollars in damages that were apportioned according to indemnities in the drilling services contracts, we should evaluate the indemnities. The topics in this paper include important risk allocation principles common to all drilling contracts, as well as services agreements relating to drilling contracts. The paper addresses specific provisions of the Macondo contracts, including responsibility for loss, payment, indemnities, and related insurance issues with particular examples from how the provisions were implemented and interpreted in the Macondo litigation.