BP agrees to pay over $4.5bn in US fines for oil spill

November 16, 2012 - 1:34:27 am

LONDON: British energy giant BP said yesterday that it had agreed to pay more than $4.5bn in US fines related to the devastating 2010 Gulf of Mexico oil spill, including a record $4bn to settle criminal claims.

“The aggregate amount of the resolution is approximately $4.5bn  (¤3.5bn), with payments scheduled over a period of six years,” BP said in a statement.

BP said it had agreed a resolution of all criminal claims with the US Department of Justice which includes $4bn to be paid in instalments over five years. It said $1.256bn of the $4bn total were for criminal fines.

It additionally agreed a resolution of all securities claims with US regulator the Securities and Exchange Commission (SEC), which includes $525m in fines to be paid in instalments over three years.

“BP today announced that it has reached agreement with the United States government, subject to court approval, to resolve all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the Deepwater Horizon accident, oil spill, and response,” the statement said.

BP chief executive Bob Dudley added: “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.

“From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologise for our role in the accident, and as today’s resolution with the US government further reflects, we have accepted responsibility for our actions.”

The company’s reputation was ravaged two-and-a-half years ago after an explosion on the BP-leased Deepwater Horizon rig killed 11 workers and sent millions of barrels of oil spewing into the sea.

The blast on April 20, 2010, sank the rig and unleashed the biggest marine oil spill in the industry’s history — and what has widely been acknowledged to be the worst US environmental disaster ever. As part of the resolution, BP said it had agreed to plead guilty to “11 felony counts of misconduct or neglect of ships officers relating to the loss of 11 lives.” BP pleaded guilty to a total of 14 criminal charges.

“Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon.” Group chairman Carl-Henric Svanberg said the “resolution is in the best interest of BP and its shareholders”.

The company added that it was “prepared to vigorously defend itself against remaining civil claims,” while increasing the amount it intends to set aside to cover all compensation costs to almost $42bn  from $38.1bn.

Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for $7.8bn, but it must still be approved by a federal judge and does not affect claims brought by the US government.