Record US Criminal Fine handed to BP over Deepwater Horizon
BP gets record US criminal fine over Deepwater disaster
15 November 2012 Last updated at 17:01
BP has received the biggest criminal penalty in US history as part of a $4.5bn (£2.8bn) settlement related to the 2010 Deepwater Horizon disaster, in which 11 people died.
The Department of Justice has imposed a $4bn fine, to be paid over five years.
BP will pay an additional $525m to the Securities and Exchange Commission over a period of three years, the firm said.
The settlement with the Department of Justice (DoJ) involves BP pleading guilty to 14 criminal charges.
The resolution with the DoJ includes a record criminal fine of $1.26bn, as well as $2.4bn to be paid to the National Fish and Wildlife Foundation and $350m to be paid to the National Academy of Sciences.
As a result, the company said that it was setting aside an additional $3.85bn on top of the $38.1bn it has been raising to cover its liabilities from the incident. The UK-based oil giant has been selling assets to raise the funds.
“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,” said Bob Dudley, BP’s chief executive.
“From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologise for our role in the accident, and as today’s resolution with the US government further reflects, we have accepted responsibility for our actions.”
BP chairman Carl-Henric Svanberg added that the resolution was in the best interests of BP and its shareholders, and allowed the company to vigorously defend itself against the remaining civil claims.
BP has agreed to plead guilty to:
eleven felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives
one misdemeanour count under the Clean Water Act
one misdemeanour count under the Migratory Bird Treaty Act
one felony count of obstruction of Congress
The resolution is subject to US federal court approval.
It is thought that a small number of BP staff may be arrested, BBC business editor Robert Peston says.
The 2010 Deepwater Horizon disaster killed 11 workers and released millions of barrels of crude into the Gulf of Mexico over 87 days.
The settlement is much bigger than the largest previous corporate criminal penalty assessed by the Department of Justice, the $1.2bn fine imposed on drug maker Pfizer in 2009.
The oil giant has been selling assets worth billions of pounds to raise money to settle all claims. The company is expected to make a final payment of $860m into the $20bn Gulf of Mexico compensation fund by the end of the year.
BP launched an internal investigation in the immediate aftermath of the explosion which concluded that no single cause was behind the accident, but “multiple companies, work teams and circumstances were involved over time”.
Other companies involved included Transocean, the owner of the rig and responsible for the safety valve known as the blowout preventer, and Halliburton, who provided cementing services.
BP is yet to reach a settlement with these firms. A civil trial that will determine negligence is due to begin in New Orleans in February 2013.
BP has settled all claims with Anadarko and Moex, its co-owners of the oil well, and contractor Weatherford, receiving $5.1bn cash settlements from the three firms, which it has put into its $20bn compensation fund.
It has also reached a $7.8bn settlement with the Plaintiffs’ Steering Committee, a group of lawyers representing victims of the spill.