The settlement is years in the making and seeks to mitigate damages caused by the largest oil spill in USA history.
The settlement, to be paid out over 18 years, ends five years of uncertainty for the United Kingdom oil giant, which has already taken charges of more than $40 billion in legal and cleanup fees for the Gulf of Mexico disaster, which killed 11 workers after a deep water oil well blew out. The well is capped in mid-July. In its first-quarter earnings report for 2015, BP said it estimated at least a $10.3 billion cost, but it also stressed the cost could be higher, depending on how many legitimate claims were filed by a recently passed deadline.
The previous judgement found BP “grossly negligent” in relation to the spill, while capping the yet to be announced fine to $13.7 billion (£8.78 billion). Separately, the USA Department of Justice files criminal charges against three BP employees in connection with the accident. The settlement allows more immediate action.
The USA Justice Department said it could be the largest settlement with a single entity in American history and the total value would top $18.7 billion.
He said the specifics of the agreement are still being worked out.
Barbier was expected to rule on that issue later this year, but even after that, BP would have still faced years of lawsuits to address claims by states and by the federal government under a natural resources damage assessment. BP had appealed both those rulings, which set the stage for the a possible multibillion-dollar Clean Water Act penalty.
September 30, 2013, SECOND PHASE OF TRIAL BEGINS: The second phase begins to determine how much oil was spilled.
“The impact of the settlement on our balance sheet and cashflow will be manageable and enables BP to continue to invest in and grow its business, underpinned by a resilient and robust financial framework”. The amount would be used to calculate damages.
The Supreme Court refused to hear their case, confirming a District Court judge’s finding of “gross negligence”, which triggers the maximum permissible fine – up to $18 billion.