The British oil company, BP, and the United States Department of Justice (DoJ) and Securities & Exchange Commission (SEC), have reached a settlement agreement for the 2010 Deepwater Horizon oil spill that devastated much of the gulf coast.
In a statement released earlier on Thursday, BP stated they were in "advanced discussions" with the DoJ and the SEC about a proposed settlement to federal criminal charges and SEC claims. The statement went on to say that the U.S. federal courts will need to approve the settlement agreement before it can go into effect. Federal, state and private civil claims are not part of current negotiations.
Law enforcement officials had told the New York Times that BP will plead guilty to environmental crimes, as well as obstruction charges. They also expected two BP employees to be charged with manslaughter.
The Associated Press reported that any settlement will most likely far exceed the previous largest corporate criminal penalty of $1.2 billion, which was assessed to Pfizer in 2009. BP has already set aside $38.1 billion to cover liability claims resulting from the Deepwater Horizon explosion and subsequent oil spill. Any settlement reached would be in addition to the $7.8 billion already paid out in March to more than 100,000 individuals and businesses for medical and economic losses.
The Deepwater Horizon rig, which was located 50 miles off the Louisiana gulf coast, exploded on April 20, 2010. Eleven people were killed in the explosion. Adam Weise, grandson of Nelda Winslette, was one of the people killed. She told the Huffington Post:
"It just bothers me so bad when I see the commercials on TV and they brag about how the Gulf is back, but they never say anything about the 11 lives that were lost. They want us to forget about it, but they don't know what they've done to the families that lost someone."
The explosion not only cost human lives to be lost, the estimated 206 million gallons of crude oil that spilled into the Gulf of Mexico killed countless marine life and birds, along with devastating the commercial fishing industry in the area. Tourism was also greatly impacted by the spill.
At 11:10 CT, BP announced that the company has agreed to a settlement. The terms of the settlement include:
- Resolution of all criminal claims with Department of Justice includes $4 billion paid in installments over a period of five years.
-Resolution of all securities claims with Securities and Exchange Commission includes $525 million paid in installments over a period of three years.
-Existing $38.1 billion charge against income to increase by approximately $3.85 billion
The total financial portion of the settlement exceeds $4.5 billion.
According to WDSU, BP will also plead guilty to one felony count of obstruction of Congress, as well 11 felony counts of misconduct which relate to the deaths of 11 people killed in the explosion.
The settlement's monetary payout includes a $1.256 billion criminal fine, nearly $2.4 billion paid to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission.
BP's Chairman, Carl-Henric Svanberg, stated:
"We believe this resolution is in the best interest of BP and its shareholders. It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."