UPDATE: Cameron To Pay BP $250 Million To Settle Oil Spill Claims

Cameron International Corporation (CAM) agreed to pay BP PLC (BP.LN) $250 million to settle all claims between the two companies relating to the giant 2010 Deepwater Horizon accident in the Gulf of Mexico, a development that may diffuse BP's responsibility for the oil spill.

The settlement by Cameron, the fourth company to pay concessions to BP, is the latest settlement in BP's quest to win back money from partners and contractors in the Macondo well.

In exchange, BP has agreed to indemnify Cameron from compensatory claims related to the accident, including environmental claims, the companies said Friday. Cameron manufactured a critical safety device intended to shut down the Deepwater Horizon well.

Christine Tiscareno, an analyst at S&P Equity Research, said the settlement with Cameron was likely to lessen the severity of future civil charges against BP. "It's less likely you can take BP and charge them with unlawful negligence if they can prove there are also parties that have agreed it's not the case," she said.

BP is still embroiled in several cases related to the Deepwater Horizon accident, which killed 11 workers and caused the worst U.S. offshore oil spill in history.

A series of reports, including two major federal investigations, published earlier this year found that BP's contractors were also at fault for the well blowout and spill.

In one case, BP said Halliburton Co. (HAL), which was in charge of cementing the drilling rig, destroyed evidence in the weeks leading up to the explosion that showed the formula used on the drilling operation was flawed. Halliburton said BP had mischaracterize the testing.

BP also continues to spar with drilling contractor Transocean Ltd. (RIG).

BP's partners in the well, Anadarko Petroleum Corp. (APC) and Mitsui & Co. Ltd. (8031.TO), and oil services company Weatherford International Ltd. (WFT) also reached agreements with BP that protect them against future claims. BP faces a key trial in February 2012 related to the case.

BP shares closed Thursday at 447.85 pence valuing the company at GBP84.93 million.

-By Jenny Gross, Dow Jones Newswires; 4420-7842-9239; jenny.gross@dowjones.com

(Alexis Flynn in London contributed to this report.)

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