BP has been told by a US federal judge that its partners involved in the Gulf of Mexico Deepwater Horizon oil spill, Transocean and Halliburton, do not have to pay compensation because of the protection afforded them in their contracts. Helm Capital expects that this ruling will end up costing BP several billion dollars.

The three companies have been involved in a legal battle over who is to blame for the disaster, which resulted in 11 deaths and almost 5 million barrels of oil spilling into the Gulf of Mexico. The southern US states affected by the spill, as well as the federal government, are in discussions over a settlement for the disaster.

Although the ruling spares Transocean and Halliburton from paying billions in damage claims, Helm Capital understands that the two companies could still be liable from civil and punitive penalties which could themselves run into the billions of dollars.

The contract between BP and Transocean provided for indemnity for each party in case of accident, with BP accepting responsibility for any pollution that originated at the well and Transocean for any pollution originating from the rig. BP had argued, unsuccessfully, that Transocean had acted in a grossly negligent manner and that this invalidated their indemnity.

Helm Capital analysts believe that BP will now push ahead with settling as many of the upcoming lawsuits as they can.