BP Says in Talks to Settle Gulf Oil Spill Criminal Claims
By Brian Swint and Margaret Cronin Fisk – Nov 15, 2012 8:24 AM ET
BP Plc (BP/), the owner of the Macondo well that in 2010 caused the worst U.S. oil spill, said it’s in talks with the government on resolutions to all criminal claims against the company.
BP is in “advanced discussions” with the Department of Justice and the Securities and Exchange Commission, the U.K. oil producer said in a statement today. The proposed resolutions won’t cover civil claims under the Clean Water Act, natural resource damages or private claims not included in a previous settlement with victims, it said.
BP Chief Executive Officer Bob Dudley reiterated last month that the company is willing to settle with the U.S. “on reasonable terms.” The criminal fines and penalties will be between $3 billion and $5 billion in a settlement that the DOJ will announce today, the British Broadcasting Corp. reported. BP declined to comment on the report.
BP is in “advanced discussions” with the Department of Justice and the Securities and Exchange Commission. Photographer: Derick E. Hingle/Bloomberg
“It’s a good sign for a broader settlement, but it’s all being conducted in a non-public forum so we don’t know for sure,” said Jason Gammel, an analyst at Macquarie Capital Europe Ltd. in London.
BP faces a maximum possible fine of $17.6 billion for civil environmental violations alone if the company is found grossly negligent by the federal judge overseeing lawsuits stemming from the spill.
BP Chief Executive Officer Bob Dudley reiterated last month that the company is willing to settle with the U.S. “on reasonable terms.” Photographer: Simon Dawson/Bloomberg
BP shares rose as much as 2 percent and traded up 0.8 percent at 429.2 pence as of 1:08 p.m. in London.
The Justice Department has yet to file any criminal charges against BP, although U.S. Attorney General Eric Holder said in May there were likely to be more criminal cases related to the spill.
Kurt Mix, a former BP engineer, has been charged with destroying evidence in the probe of the spill.
“A further announcement will be made if and when final agreements are reached,” BP said today. “Until final agreements are reached, there can be no certainty any such resolutions will be entered into.”
The April 2010 Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The sinking of Transocean Ltd. (RIG)’s Deepwater Horizon drilling rig and the spill led to hundreds of lawsuits against BP and its partners and contractors.
The U.S. Justice Department sued BP in December 2010, alleging the company failed to prevent or contain the spill and seeking fines for each barrel of oil discharged.
The government estimated that more than 4 million barrels of oil were spilled. If BP is found to be grossly negligent, a legal standard the government would have to prove showing the accident resulted from a conscious BP act or omission, it could be fined as much as much as $4,300 per barrel.
BP set aside $3.5 billion to pay potential Clean Water Act fines, using its own estimate of 3.2 million barrels and a maximum fine of $1,100 per barrel without gross negligence.
BP reached a settlement with most non-government plaintiffs in March, agreeing to pay an estimated $7.8 billion. That settlement averted a trial scheduled to determine liability for the disaster.
BP agreed to pay most claims for economic loss, property damage and injuries from businesses, property owners and other non-government victims of the spill. BP also established a medical-monitoring program to handle claims from people who contend they are suffering medical problems from the oil or chemicals used to clean it up.
BP and lawyers representing non-government victims of the spill won preliminary court approval of the proposed settlement agreement in May and argued for final approval at a hearing before Barbier Nov. 8. His decision is pending.
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