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BP to Pay $18.7bn for Deepwater Horizon Oil Spill

BP logoBP has agreed to pay up to $18.7 billion as part of a settlement reached late last week over the deadly 2010 Deepwater Horizon oil spill.

The agreement includes the US federal government, the states of Alabama, Florida, Louisiana, Mississippi and Texas and also includes settlement of claims made by more than 400 local government entities. BP will pay the $18.7 billion over 18 years.

This includes:

  • BP Exploration and Production will pay the US a civil penalty of $5.5 billion under the Clean Water Act, payable over 15 years.
  • BPXP will pay $7.1 billion to the US and the five Gulf states over 15 years for natural resource damages (NRD). This is in addition to the $1 billion already committed for early restoration. BPXP will also set aside an additional amount of $232 million to be added to the NRD interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement.
  • A total of $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.
  • Up to $1 billion will be paid to resolve claims made by more than 400 local government entities.

In November 2012, the EPA banned BP from federal contracts due to what the agency called BP’s “lack of business integrity” as demonstrated by the Deepwater Horizon blowout, explosion, oil spill and response.

Earlier that month BP agreed to pay $4.5 billion and pleaded guilty to 11 counts of misconduct or neglect of ship officers, one count of obstruction of Congress, one misdemeanor count of a violation of the Clean Water Act, and one misdemeanor count of a violation of the Migratory Bird Treaty Act, all arising from its conduct leading up to or its response after the 2010 Deepwater Horizon disaster. The explosion killed 11 people and caused what the EPA describes as the largest environmental disaster in US history.

 

 

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