BP agrees to settle claims from 2010 Gulf of Mexico oil spill

Posted Jul 6, 2015 by Nathan Salant
Oil giant BP Plc has agreed to pay nearly $19 billion in penalties to U.S. and state agencies to resolve claims still outstanding from a 2010 oil spill in the Gulf of Mexico that killed 11 and ravaged the southern U.S. coastline.
DISASTER: Boats equipped with water cannons fight the devastating fire at the Deepwater Horizon dril...
DISASTER: Boats equipped with water cannons fight the devastating fire at the Deepwater Horizon drilling platform in the Gulf of Mexico in 2010.
U.S. Coast Guard/Wikimedia Commons
The $18.7 billion agreement between BP, formerly known as British Petroleum, Washington and five states is being called the largest corporate settlement in U.S. history, according to the Reuters news service.
The settlement amount is in addition to $43.8 billion that BP already had committed for cleanup costs and criminal and civil penalties resulting from the spill, which began after an explosion on the Deepwater Horizon drilling platform in the gulf.
Millions of gallons of oil flowed from the damaged rig into the gulf for nearly three months before the leak was capped, Reuters said.
Eleven workers on the Deepwater Horizon rig were killed in the explosion.
"This is a realistic outcome which provides clarity and certainty for all parties," BP Chief Executive Officer Bob Dudley said in a written statement after the agreement was announced on July 2.
"For BP, this agreement will resolve the largest liabilities remaining from the tragic accident," he said.
Gov. Bobby Jindal of Louisiana, the state that suffered the most damage from the spill, applauded the settlement.
"This agreement will not only restore the damage inflicted on our coastal resources by the Deepwater Horizon oil spill, it will also allow Louisiana to continue aggressively fighting coastal erosion," said Jindal, a candidate for the 2016 Republican presidential nomination.
The settlement, which still is subject to approval by U.S. District Court Judge Carl Barbier in New Orleans, resolves just about all outstanding claims against the oil company resulting from the spill.
The agreement requires BP to pay around $13 billion to the federal government for natural resource damages and $4.9 billion to states, staggered over as long as 18 years.
U.S. Attorney General Loretta Lynch applauded the agreement from the nation's capital in Washington, D.C.
"If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come," she said.
The settlement also seemed to please BP investors, who pushed company shares up by 5 percent on the news.
BP is expected to be seen as an attractive takeover target with its spill liability resolved, Reuters said.
Outstanding claims by Alabama, Florida, Mississippi and Texas, as well as claims by 400 local government agencies, also were resolved in the July 1 settlement, Reuters said.