BP shares rose yesterday after its £4.97billion deal with 110,000 businesses and individuals over the Deepwater Horizon rig disaster.
The blue-chip stock rose more than 2% to 509p as City analysts said the out-of-court settlement worth $7.9billion was less than expected and a crucial step towards removing uncertainty over the business.
America’s justice department is still bringing a federal negligence case against BP following the explosion on April 2010, which resulted in the death of 11 workers and millions of barrels of oil leaking into the Gulf of Mexico. If BP is found grossly negligent it could be fined as much as £11.3billion under the Clean Water Act.
Investec Securities analyst Stuart Joyner said: “Despite the tough rhetoric, the hope will be that the government will now settle.
“BP can now argue to have (pretty much) completed the remediation and compensation process to the environment and individuals. We suspect it is not in the White House’s interest to drag the process out to the US general election and beyond.”
BP thrashed out an agreement with the plaintiffs’ steering committee (PSC) late on Friday night.
It expects the money to come from the £12.6billion compensation fund it set up following the worst spill in US history.
BP chief executive Bob Dudley said: “From the beginning, BP stepped up to meet our obligations to the communities in the gulf coast region and we’ve worked hard to deliver on that commitment for nearly two years. The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the gulf coast.”
A trial in the case due to start yesterday has been postponed indefinitely to allow BP to finalise its deal with the PSC.
BP shares closed about 1.6% higher at 504.6p, still well below the 650p seen before the disaster. The stock slumped as low as 300p in July 2010.
BP said yesterday that production had restarted from the Foinaven field west of Shetland following a shutdown for precautionary inspections and testing of pipelines.
The group said at the end of January the field had been closed following the discovery of a “small” oil leak. An oil and water mix had escaped through a hairline crack in a subsea flowline on the seabed about two miles from the field production vessel, the Petrojarl Foinaven.
Foinaven production was around 43,000 barrels a day at the time of the shutdown.