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BP to pay $4.5bn in oil spill settlement

British oil firm pleads guilty to criminal charges relating to 2010 Gulf of Mexico disaster and agrees to pay penalty.
Last Modified: 16 Nov 2012 00:48

BP Plc has pleaded guilty to criminal charges relating to its 2010 oil spill and agreed to pay an extra $4.5bn on top of the tens of billions it is already paying out.

The British oil company said on Thursday that it would plead guilty to 11 felony counts of misconduct or neglect relating to the death of 11 workers, one misdemeanour count under the Clean Water Act, one misdemeanour count under the Migratory Bird Treaty Act, and one felony count of obstruction of congress.

BP will also pay $525m to settle securities claims with US regulators. In aggregate BP said it would pay the
$4.5bn over six years for the various resolutions.

"There can be no question that this historic announcement represents a critical step forward, and really underscores the justice department's determination to stand with the Gulf Coast communities," Eric Holder, US attorney general, said in New Orleans.

BP will have to retain a monitor for four years, charged with overseeing safety and risk management, as well as an independent auditor to ensure compliance with the terms of the agreement, he said.

The company said that it was "prepared to vigorously defend itself against remaining civil claims".

Exceeding previous record

BP's penalties for the explosion on the Deepwater Horizon rig and subsequent leak from the Macondo oil well, will far
exceed the previous record for largest criminal penalty in US history.

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Al Jazeera's John Terrett, reporting from Washington DC on Thursday, said that there was no word at this time on whether any BP employees would be arrested, although sources have said that between two to four would be.

"We understand that two members of staff have been charged with manslaughter and one has been charged with lying to the authorities. But we're still waiting for clarification of this and whether they may eventually serve jail time," he said.

The blast of April 20, 2010, sank the Deepwater Horizon and unleashed the biggest marine oil spill in the industry's history - and what has widely been acknowledged to be the worst US environmental disaster.

Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for $7.8bn, but it must be approved by a federal judge and does not affect claims brought by the government.

Over the past two years, BP has so far sold non-core assets totalling more than $35 bn to help fund massive compensation costs arising from the tragedy. The figure is set to reach $38 bn by late 2013.

Last month, BP posted bumper profits and raised its shareholder dividend as the energy giant prepared for a new Russia adventure after being hit by the Deepwater Horizon crisis.

Net profit jumped 7.7 per cent to $5.43 bn in the third quarter, or three months to September, compared to the same part of last year.

BP unveiled a strategic deal with the Russian state oil firm Rosneft in an attempt to reposition itself after the Deepwater Horizon disaster.

Analysts believe that the Rosneft deal could lead to major exploration projects in the Arctic.

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