BP has reached agreements in principle to settle all US federal and state claims arising from the Deepwater Horizon accident and spill in 2010.
The UK oil giant said today its US upstream subsidiary, BP Exploration and Production (BP E&P), had struck deals with the federal government and five Gulf Coast states.
An agreement with the states of Alabama, Florida, Louisiana, Mississippi and Texas also includes settlement of claims made by more than 400 local government bodies.
BP E&P is to pay the US a civil penalty of $5.5 billion under America’s Clean Water Act – payable over 15 years.
It will also 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 $1billion already committed for early restoration.
BP E&P will also set aside an additional amount of $232million to be added to the NRD interest payment to cover any further natural resource damages that were not known about at the time of the agreement.
A total of $4.9billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.
Up to $1billion will be paid to resolve claims made by more than 400 local government bodies.
BP said the likely impact of these agreements would be to increase the cumulative pre-tax charge associated with the Deepwater Horizon accident and spill by around $10billion from $43.8billion at the end of the first quarter.
Chairman Carl-Henric Svanberg added: “Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise.
“We have made significant progress and with this agreement we provide a path to closure for BP and the Gulf.
“It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved.”
Chief executive Bob Dudley said: “This is a realistic outcome which provides clarity and certainty for all parties.
“For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs.”
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