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US court approves $4bn BP criminal penalty

The British oil giant must pay another record settlement for it role in the massive oil disaster in the Gulf of Mexico.
Last Modified: 29 Jan 2013 20:38
The explosion at the BP's Deepwater Horizon well claimed the lives of 11 oilmen in April 2010 [EPA]

A US judge has approved an agreement for British oil giant BP PLC to plead guilty to manslaughter and other charges and pay a record $4bn in criminal penalties for the company's role in the 2010 oil disaster in the Gulf of Mexico.

More than 200 million gallons of oil spewed in the three months before BP's blown-out Macondo well could be capped. It was one of the worst environmental disasters in US history.

Returning to the Gulf two years after the BP oil spill

BP agreed in November to plead guilty to charges involving the deaths of 11 workers in the drilling rig explosion that started the spill and for lying to Congress about the size of the spill.

The company could have withdrawn from the agreement if US District Judge Sarah Vance had rejected it.

Neither the Justice Department nor BP presented arguments to the judge before her decision.

Vance said the plea deal was "just punishment" considering the risks of litigation for BP and the alternatives to the settlement.

She told victims' relatives who were in court that she read their "truly gut-wrenching" written statements and factored their words into her decision.

BP America vice president Luke Keller apologized to the relatives of the workers who died and for the spill's environmental damage to the Gulf Coast.

"BP knows there is nothing we can say to diminish their loss," he said. "The lives lost and those forever changed will stay with us. We are truly sorry."

The deal doesn't resolve the federal government's civil claims against BP. The company could pay billions more in penalties for environmental damage.

One of many legal decisions

A series of government investigations have blamed the April 20, 2010, blowout on time-saving, cost-cutting decisions by BP and its partners on the drilling project.

BP separately agreed to a settlement with lawyers for Gulf Coast residents and businesses who claim the spill cost them money.

BP estimates the deal with private attorneys will cost the company roughly $7.8bn.

For the criminal settlement, BP agreed to pay nearly $1.3bn in fines. The largest previous corporate criminal penalty assessed by the Justice Department was a $1.2bn fine against drug maker Pfizer in 2009.

The criminal settlement also includes payments of nearly $2.4bn to the National Fish and Wildlife Foundation and $350m to the National Academy of Sciences.

In a court filing before the hearing, attorneys for BP and the Justice Department argued that the plea agreement imposes "severe corporate punishment" and will deter BP and other deep-water drilling companies from allowing another disaster to occur.

The Justice Department has reached a separate settlement with rig owner Transocean Ltd. that resolves the government's civil and criminal claims over the Swiss-based company's role in the disaster.

Transocean agreed to plead guilty to a misdemeanor charge of violating the Clean Water Act and pay $1.4bn in civil and criminal penalties.

Another US district judge has scheduled a February 14 hearing to decide whether to accept that criminal settlement. A different judge will decide whether to accept Transocean's civil settlement.

Many relatives of rig workers who died in the blast submitted written statements that were critical of BP's deal.

Four current or former BP employees have been indicted on separate criminal charges.

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Source:
Agencies
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