BP Facing Record Criminal Penalty for Gulf of Mexico Oil Spill
On November 15, Reuters reported that the UK oil producer BP (LON:BP) was expected to pay the largest criminal penalty in US history over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. The BP confirmed that it was in “advanced discussions” with the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) over a proposed settlement, while noting that no final agreement has yet been reached.
**BP Expected to Pay Biggest Criminal Penalty in US History**
Reuters quotes people familiar with the talks between BP and the DoJ as saying that the UK oil giant is expected to pay a record criminal penalty and plead guilty to criminal misconduct in the 2010 Deepwater Horizon disaster, which killed 11 workers and set off the worst offshore oil spill in US history. Although the sources did not comment on the amount to be paid by the BP, one of them noted that it would almost certainly be the largest criminal penalty in US history. The current penalty record holder is Pfizer Inc (NYSE:PFE), which in 2009 paid a $1.3 billion (£821 million) fine as part of a settlement to resolve charges over the illegal promotion of the non-steroidal anti-inflammatory drug Bextra.
As reported by Bloomberg, the US DoJ is yet to file criminal charges against BP, although in May, US Attorney General Eric Holder noted that there were likely to be more criminal cases. So far, only Kurt Mix, a former BP engineer, has been charged with intentionally destroying evidence related to the spill by deleting text messages from his iPhone.
On November 15, BP itself confirmed in a press release that it was in “advanced discussions” with the DoJ and the SEC. The company however pointed out that so far no final agreements have been reached and that any agreed resolutions would be subject to approval by US federal courts. BP also noted that until final agreements were reached, “there can be no certainty any such resolutions will be entered into.”
The FT reports that BP had hoped to resolve civil and criminal actions by means of a single settlement, but talks have been complicated by disagreements among the various governments over how a settlement should be shared out.
The UK oil giant noted in its press release that the proposed resolutions were not expected to cover federal claims including those made under the Clean Water Act, with the NY Times reporting that the potential Clean Water Act fine for the spill is $1,100 to $4,300 per barrel spilled, meaning that the penalty could be as much as $21 billion.
!m(/uploads/story/823/thumbs/pic1_inline.png)The FT reports that other companies involved in the Gulf disaster, including Transocean (NYSE:RIG, FRA:TOJ), the owner of the Deepwater Horizon rig, and Halliburton (NYSE:HAL), which supplied cement intended to secure the well, could also come under pressure to reach settlements following the BP deal.
While Halliburton has said that it was not responsible for the accident since it carried out its work properly, Transocean indicated in September that it was in talks with the DoJ over a potential $1.5 billion settlement.
Invest in commodities like Gold, Wheat, Lithium, Oil & more in minutes with our highest-rated broker, eToro.
77% of retail CFD accounts lose money.
Looking to invest?
Invest and trade CFD stocks, ETFs, digital assets & commodities in minutes with our highest-rated broker.