Tuesday 24 October 2017

BP is slapped with record $18.7bn fine for US oil spill

Record pay-out: BP
Record pay-out: BP

Margaret Cronin Fisk, Laurel Calkins and Del Quentin Wilber

BP will pay a record $18.7bn (€16.8bn) to resolve claims by the US and five states along the Gulf of Mexico related to the 2010 oil spill.

The payments will be spaced out over as long as 18 years, according to the preliminary agreement. A record $5.5bn will cover federal penalties under the Clean Water Act, topping the previous high of $1bn. Louisiana, Mississippi, Alabama, Florida and Texas will also receive payouts for harm done in the worst offshore spill in US history.

"This agreement will resolve the largest liabilities remaining from the tragic accident," BP chief executive officer Bob Dudley said in a statement.

"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."

The settlement comes on top of at least $28bn BP has already spent on response, clean-up and compensation. It also exceeds by almost $3bn the $43.8bn the company set aside for fallout from the spill.

Shares gained 3.7pc to 434.70 pence at 2:45pm in London as investors welcomed news that the company had reached an agreement.

A verdict in the Clean Water Act case was pending with a potential fine of as much as $13.7bn. Under the agreement, BP will pay $5.5bn over 15 years.

The company's cumulative pre-tax charge will rise by about $10bn at the end of the first quarter, BP said.

The three-month catastrophe was the biggest offshore spill in US history. It began with the Macondo well blowout and destruction of the Deepwater Horizon rig. Eleven men died in the explosion.

The agreement is the "largest settlement with a single entity in American history", US Attorney General Loretta E Lynch said. The agreement in principle will be subject to public comment before court approval, she said. (Bloomberg)

Irish Independent

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