BP to Pay $4.5 Billion in Gulf Settlement

The British oil company BP, has announced that it will pay $4.5 billion in fines and payments to the U.S. government and plead guilty to 14 criminal charges in connection with the giant oil spill in the Gulf of Mexico two years ago, according to The New York Times.

The payments include a $4 billion fine to be paid over five years, much of which will go to government environmental agencies, BP said in a statement.

BP plead guilty to 11 felony misconduct or neglect charges related to the deaths of 11 people in the 2010 Deepwater Horizon accident, which unleashed millions of barrels of oil into the gulf.

According to a law enforcement official familiar with the case, two BP employees will be charged with manslaughter. U.S. Attorney General, Eric H. Holder Jr., was scheduled to hold a news conference in New Orleans later Thursday.

The company said it was in talks with the U.S. about settling criminal claims stemming from the spill; however, BP would still be subject to other federal civil claims and claims for damages to natural resources.

BP’s settlement does not include potential fines for the spill under the Clean Water Act, which range from $1,100 to $4,300 per barrel spilled. The total fine for the spill could be as much as $21 billion, according to Peter Hutton of RBC Capital Markets in London.

The company said it would like to reach a settlement with claimants if the terms were reasonable. The unresolved issue of the claims has been weighing on BP’s share price.

In March, BP agreed with the lawyers for plaintiffs to settle claims on economic loss, including from the local seafood industry, and medical claims stemming from the oil spill. BP said at the time it expected the cost of that settlement to be about $7.8 billion, which it will pay from a trust the company set aside to cover such costs.

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Source: New York Times