by Canadian Manufacturing.com Staff
BP settles Deepwater Horizon claims for US$18.7B
Five years after spill, oil giant agrees to settle federal, state and local claims
The company has announced that its US Upstream subsidiary, BP Exploration and Production, has executed the agreements with the US federal government and five Gulf Coast states. The agreement with the states of Alabama, Florida, Louisiana, Mississippi and Texas also includes settlement of claims made by more than 400 local government entities.
“This is a realistic outcome which provides clarity and certainty for all parties,” Bob Dudley, BP’s group chief executive, said
“For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs. For the United States and the Gulf in particular, this agreement will deliver a significant income stream over many years for further restoration of natural resources and for losses related to the spill,” he added.
Under the settlement, BP is to pay the United States a civil penalty of $5.5-billion under the Clean Water Act, which will be paid over 15 years.
The company will also pay $7.1-billion to the United States and the five Gulf states over 15 years for natural resource damages. This is in addition to the $1 billion already committed for early restoration. BP will also set aside an additional amount of $232 million to be added to the NRD interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement.
A total of $4.9-billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.
Finally, up to $1 billion will be paid to resolve claims made by more than 400 local government entities.
“Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise. We have made significant progress, and with this agreement we provide a path to closure for BP and the Gulf. It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved,” Carl-Henric Svanberg, BP’s chairman, said.
U.S. Attorney General, Loretta Lynch, was pleased to reach an agreement. She said the government’s Deepwater Horizon team has has fought aggressively in federal court to ensure the burden of restoring the environment and the economy after the damage inflicted by the spill would not fall on tax payers. She added that proving BP’s gross negligence resulted in the Deepwater disaster was another of the team’s goals.
“If approved by the court, this settlement would be the largest settlement with a single entity in American history,” she said. “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.”