News Column

BP to Pay Record $4.5 Billion for Deepwater Oil Spill

Nov. 15, 2012
Deepwater Horizon burning in Gulf of Mexico.
Deepwater Horizon burning in Gulf of Mexico.

Oil giant BP Thursday agreed to pay 4.5 billion dollars to the US authorities for criminal claims arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, the company said in London.

Following a settlement reached with the US Justice Department and the Securities and Exchange Commission (SEC) over "all US federal government criminal and SEC claims against BP, the sum will be paid over a period between five to six years.

The penalty is believed to be the largest ever paid in US corporate history, exceeding the 1.2-billion-dollar fine paid by drugs group Pfizer for marketing fraud in 2009.

Eleven oil workers died in the explosion, which triggered the biggest environmental disaster in US history, releasing 4.9 million barrels of crude oil into the Gulf of Mexico over a period of 87 days.

"All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region," said Bob Dudley, BP's chief executive.

"We apologize for our role in the accident, and as today's resolution with the US government further reflects, we have accepted responsibility for our actions."

Dudley said that the agreement eliminated the possibility of any further federal criminal charges against BP, which marked "another significant step forward in removing legal uncertainty."

BP chairman Carl-Henric Svanberg said the resolution was 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."

As part of the agreement, BP agreed to plead guilty to 11 counts of misconduct or neglect relating to loss of life, the statement said. The accident was due to "multiple causes," it added.

BP will pay 4 billion dollars, including 1.2 billion dollars in criminal fines, in installments over a period of five years.

A total of 2.39 billion dollars will be paid to the National Fish and Wildlife Foundation over a period of five years. In addition, 350 million dollars will be paid to the National Academy of Sciences over a period of five years.

BP has undertaken large-scale asset sales to raise funds to meet the claims, enabling it to set aside 38 billion dollars to cover its liabilities from the disaster.

Aside from legal claims, BP expects to make a final payment of 860 million dollars into a 20-billion-dollar Gulf of Mexico Trust Fund by the end of the year.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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