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article imageBP's fine for Deepwater Horizon oil spill cut by billions

By Karen Graham     Jan 16, 2015 in Business
Investors are breathing a sigh of relief after learning BP will be facing a maximum fine of $13.7 billion under the Clean Water Act. This is several billion dollars less than originally feared for their responsibility in the Deepwater Horizon oil spill.
On Thursday, U.S. District Judge Carl Barbier has decreased BP's maximum fine from $17.6 billion to $13.7 billion after ruling the government's estimate of 4.2 million barrels of oil spilled in the Gulf of Mexico was too high.
The judge ruled that BP dumped 3.2 million barrels of oil into the Gulf in 2010. BP had estimated the flow at 2.45 million barrels. The ruling gave BP's shares on the American stock market a slight boost, rising 1.0 percent to $36.20 per share.
On September 4, 2014, Barbier ruled BP was guilty of "gross negligence' and willful misconduct. Under the Clean Water Act, BP could be fined up to $4,300 for each barrel spilled. BP had sought a "simple negligence" ruling, limiting the fine to $1,100 a barrel.
On Thursday, however, Barbier said the London-based oil company was not grossly negligent in its response to the disaster but stuck to his ruling that BP was grossly negligent in the events leading up to the blowout at the Macondo well site. On Tuesday, penalties will be assigned in the third and final phase of the trial taking place in New Orleans.
Bloomberg is reporting that Geoff Morrell, a BP spokesman, said in an email today that the company doesn’t believe it deserves the maximum Clean Water Act fine.
The company has set aside $43 billion to cover "all costs," as revealed in an October 28 earnings statement, even though the actual costs are “subject to significant uncertainty,” BP said. Uncertainty will undoubtedly be a factor because with the Clean Water Act fines will come additional bills to pay after a lengthy Natural Resources Damage Assessment is concluded.
More about bp oil spill, Deepwater horizon, Fine cut by billions, final phase of trial, government estimates
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