BP AGREES TO PAY $4 billion settlement


BP agrees to criminal plea, $4 billion settlement in Gulf oil spill case

Oil spills throughout history: The Deepwater Horizon oil spill has surpassed the size of the 1969 Santa Barbara spill and the Exxon Valdez. Here are some other historical spills.
By Steven Mufson, Published: THURSDAY, NOVEMBER 15, 11:25 AM ET
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BP has agreed to a criminal plea and will pay $4 billion over five years in a settlement with the Justice Department over the 2010 oil spill in the Gulf of Mexico, the company said Thursday.

In addition, the London-based oil giant will pay $525 million over three years to settle claims with the Securities and Exchange Commission.

BP said it would increase its existing $38.1 billion charge against earnings for the spill by $3.85 billion.

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A source says oil giant BP has agreed to pay the largest criminal penalty in U.S. history, totaling billions of dollars, for the 2010 oil spill in the Gulf of Mexico.
The criminal settlement does not cover federal civil claims, including Clean Water Act claims, federal and state claims of damages to natural resources or private civil claims. Settling those would probably cost BP billions of dollars more, and the company said it is “prepared to vigorously defend itself against remaining civil claims.”

But it would resolve a variety of criminal charges. BP agreed to plead guilty to 11 felony counts of misconduct or neglect of ships’ officers relating to the loss of 11 lives on the drilling rig that caught fire and sank; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress.

The settlement is subject to U.S. federal court approval.

“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,” Bob Dudley, BP’s chief executive, said in a statement. “From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

“We believe this resolution is in the best interest of BP and its shareholders,” Carl-Henric Svanberg, BP’s chairman, said in the statement. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

The Justice Department is expected to make its own announcement early Thursday afternoon in New Orleans.

It was unclear how BP’s plea would affect its ability to bid on contracts to supply fuel to the U.S. military. BP has been a major supplier of fuel to the Pentagon in the past. But analysts expect that it will not impair the company’s ability to lease areas of the Gulf of Mexico or explore for oil and gas there. The company said that it “has not been advised of the intention of any federal agency to suspend or debar the company in connection with this plea agreement. BP will continue to work cooperatively with the debarment authority.”

People with information on the matter said that some BP executives or managers might be charged separately in connection with the alleged misreporting of the size of the spill and regarding events the night the Deepwater Horizon oil rig blew out, killing 11 people, sinking the rig and triggering the nearly 5 million-barrel oil spill.

Private civil claims are being pursued in a lawsuit in a New Orleans federal court, where a settlement estimated at $7.8 billion is being finalized.

The BP settlement with the Justice Department is not expected to cover other companies, rig owner and operator TransOcean and cement contractor Halliburton, both involved in the accident of April 20, 2010.
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