BP yesterday agreed to pay a record $4.5 billion (€3.13 billion) in fines for the 2010 Gulf of Mexico oil spill and will plead guilty to obstruction and criminal neglig-ence in the deaths of 11 workers.
The company’s reputation was ravaged after an April 20 explosion on the BP-leased Deepwater Horizon rig unleashed the biggest marine oil spill in history.
It took 87 days to cap BP’s runaway Macondo well 1,500 metres below the water surface as it spewed some 4.9 million barrels of oil into the Gulf of Mexico.
Yesterday’s settlement does not close the book on BP’s lengthy and complex legal battle over the devastating spill, and must still be approved by a federal judge.
BP is also still on the hook for economic damages, including the cost of environmental rehabilit-ation, and could pay as much as $18 billion in civil penalties.
The massive criminal fine will be relatively easy for BP to absorb. It has a market value of $127 billion and last month raised its shareholder dividend after posting a bumper third-quarter profit of $5.43 billion.
BP also signalled it will continue to aggressively pursue damages from rig operator Transocean and subcontractor Halliburton, which was responsible for the well’s faulty cement job.
“Today’s agreement is consist-ent with BP’s position in the on-going civil litigation that this was an accident resulting from multiple causes, involving multiple parties, as found by other official investigations,” the oil giant said.
BP vowed to “continue to vigorously defend itself against all remaining civil claims and to contest allegations of gross negligence in those cases”.
Yesterday ’s settlement includes an agreement to plead guilty to 14 criminal charges, 13 of which are “based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon”, BP said.
The charge of obstruction of Congress stems from two false statements BP made about flow rate estimates from the well.
Group chairman Carl-Henric Svanberg said the “resolution is in the best interests of BP and its shareholders”.
BP shares rose slightly on the news, even as the energy giant said it will increase the amount it intends to set aside to cover all compensation costs to almost $42 billion from $38.1 billion. Much of that charge has already been absorbed on its balance sheets.
Environmental group Greenpeace was quick to slam the settlement as inadequate.
“This fine amounts to a rounding error for a corporation the size of BP,” Greenpeace senior investigator Mark Floegel said.
“Nothing in this proposed settlement gives any oil company incentive to be more careful in future operations. Cutting corners and skimping on safety will still be the rule of the day.”
BP chief executive Bob Dudley issued a statement expressing the company’s deep regret for the loss of life during the accident and for the spill’s impact on the Gulf coastal region.