Business
BP agreed to the largest corporate settlement in history, $18.7 billion, to settle most claims after the massive 2010 Deepwater Horizon oil spill. The agreement comes on top of the $43.8 billion that BP has already set aside for criminal and civil penalties and cleanup costs, reports Reuters. BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.
Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation. The rig explosion on April 20, 2010, the worst offshore oil disaster in U.S. history, killed 11 workers and spewed millions of barrels of oil onto the shorelines of several states for nearly three months. The agreement, which still needs to be approved by courts, covers Clean Water Act fines and natural resources damages, along with claims by Alabama, Florida, Louisiana, Mississippi and Texas as well as 400 local government entities. "This is a realistic outcome which provides clarity and certainty for all parties," BP Chief Executive Officer Bob Dudley said in a statement. "For BP, this agreement will resolve the largest liabilities remaining from the tragic accident."
The spill coated a delicate undersea world in black, killing fish, coral and wildlife and bringing a tide of trouble to shore, writes MSNBC. Tourism cratered. The fishing industry failed. And residents complained of property erosion (from dead sea grass) and respiratory problems from spill-related vapors. The timing of the deal also struck some as troubling, a classic bad news dump hastily arranged hours before much of the county logs off and heads outside for the holiday. Indeed, the fine is the largest in the history of the Clean Water Act – but it’s dramatically less than what it could have been before years of successful legal wrangling by BP. It comes after a long line of court decisions and judiciary handicapping and horse-trading, which started even before the well was capped. At some level the state and federal government just seemed tired of pouring taxpayer dollars into the legal fight. Florida attorney general Pat Bondi said the deal averted a legal “black hole.”
While the settlement announced Thursday would resolve some of BP’s biggest liabilities, the litigation over the spill isn’t entirely over, notes the Wall Street Journal. The company is being sued in about 3,000 civil cases in U.S. and foreign courts, which include complaints brought by shareholders, and has yet to set aside money for potential costs.
