Gulf Oil Spill: First-Party Coverage Implications. Macondo Well Blowout

I. BACKGROUND

On April 20, 2010, an explosion and fire occurred on the oil rig Deepwater Horizon, which had been drilling a subsurface oil well in the Mississippi Canyon 252 area of the Gulf of Mexico, 42 miles southeast of the Louisiana coast and 130 miles southeast of New Orleans. The fire continued to burn until the rig sank to the bottom of the Gulf two days later. Although the cause remains under investigation, it is believed that the explosion resulted from a natural gas bubble that traveled from the well up to the rig, culminating in a blowout.

The incident brought about the deaths of eleven of the 126 crew members on board the rig. The ongoing release of oil from the underwater wellhead has created an oil slick that covers thousands of square miles of the ocean surface and has started to wash ashore along the Gulf coast. The well continues to release oil into the Gulf at an undetermined rate that has been estimated by some to be five thousand barrels