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BP to pay $4.5 bn in oil spill plea deal

Source : BUSINESS_STANDARD
Last Updated: Thu, Nov 15, 2012 19:41 hrs

BP Plc will pay a $4 billion penalty and plead guilty to felony misconduct in the Deepwater Horizon disaster that caused the worst offshore oil spill in the country's history, the company said on Thursday.

The company will also pay $525 million to settle securities claims with US regulators. In aggregate BP said it will pay $4.5 billion over six years for the various resolutions.

BP's penalties for the April 2010, explosion on the Deepwater Horizon rig in the Gulf of Mexico in which 11 workers died, and subsequent leak from the Macondo oil well, will far exceed the previous record for largest criminal penalty in US history. That record was held by pharmaceutical company Pfizer Inc, which paid a $1.3 billion fine in 2009 for marketing fraud.

BP, which replaced its chief executive after the spill as its market value plummeted, still faces economic and environmental damage claims sought by four Gulf Coast states and other private plaintiffs.

The mile-deep Macondo well spewed 4.9 million barrels of oil into the Gulf over 87 days, fouling shorelines from Texas to Florida and eclipsing in severity the 1989 Exxon Valdez spill in Alaska.

BP has been negotiating for months with the US government and Gulf Coast states to settle billions of dollars of potential civil and criminal liability claims.

A deal could resolve a significant share of the liability the oil company faces, but is not the "global" deal to resolve all outstanding civil and criminal liability with the US government and Gulf Coast states.

BP's United States shares were up about 1.3 per cent on Thursday while its London-traded shares were 0.3 per cent higher.



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