BP agrees to $4.5 billion in penalties over 2010 gulf oil spill

BP Plc reached a settlement with the U.S. government for $4.5 billion that will end all criminal charges and resolve securities claims relating to the worst U.S. oil spill.

The London-based company announced a $4 billion settlement today with the U.S. Justice Department that includes a record $1.256 billion criminal fine, which would be paid over five years. The company agreed to five years’ probation and also will pay $525 million to settle charges with the Securities and Exchange Commission, according to a press release.

BP said it has agreed to plead guilty to 11 felony counts of misconduct or neglect of ships officers related to the 11 deaths, one misdemeanor count under the Clean Water Act, one misdemeanor count under the Migratory Bird Treaty Act and one felony count of obstruction of justice.

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region,” BP Chief Executive Officer Bob Dudley said today in a statement. “We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

Two of the company’s employees face manslaughter charges over deaths from the explosion of the oil well, which resulted in the worst U.S. oil spill, said a person familiar with the charges, who requested anonymity because the charges haven’t been made public.

Five-Year Payments

U.S. Attorney General Eric Holder is scheduled to attend a news conference today in New Orleans on the settlement.

The criminal penalty part of the settlement is the largest in U.S. history, eclipsing the $1.195 billion paid by Pfizer Inc. for marketing fraud in 2009.

Along with the criminal fine, the resolution with the Justice Department includes a total of $2.4 billion that will be paid to the National Fish & Wildlife Foundation over a period of five years. Another $350 million will be paid to the National Academy of Sciences over that same period.

Peter Hutton, an analyst at RBC Capital Markets, said the settlement was “positive” because the total was at the “low to midpoint of expectations.”

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.

The company said in its release that it will “continue to vigorously defend itself against all remaining civil claims and to contest allegations of gross negligence in those cases.”

Kurt Mix, a former BP engineer, has been charged with destroying evidence in the probe of the spill.

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