BP share price: Company suffers setback in limiting oil spill payouts

on May 20, 2014
Updated: Apr 9, 2020
Listen

iNVEZZ.com, Tuesday, May 20: BP Plc (LON:BP) has failed to convince an appeals court to block businesses from recovering money over the 2010 Gulf of Mexico oil spill even if they could not trace their losses to the disaster.

BP’s share price has lost about 0.8 percent in London so far this morning.
**New legal setback**
Reuters today quoted a court filing by the Fifth Circuit in New Orleans as showing that the appellate court had upheld its March decision. At the time, the court ruled by a 2-1 majority that under BP’s settlement agreement, businesses did not have to prove that their losses were caused by the disaster. (BP share price: US court rejects BP appeal over oil spill payments)

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

In yesterday’s ruling, eight of the 13 judges said that they agreed with the earlier panel’s decisions which had rejected most of BP’s arguments, and declined the company’s call for an “en banc” review.
The Financial Times quoted Judge Edith Clement as saying in a dissent backed by two other judges that previous court rulings would “funnel BP’s cash into the pockets of undeserving non-victims” of the spill.

While BP reached a court-supervised settlement in 2012 with thousands of claimants affected by the Deepwater Horizon disaster, the company has been arguing that the interpretation of the settlement by the court-appointed administrator has allowed businesses which suffered no losses as a result of the spill to receive compensation.


“BP is disappointed that the full Fifth Circuit will not be considering the divided panel decisions related to the compensation of claims for losses that have no apparent connection to the spill,” BP spokesman Geoff Morrell said, as quoted by Bloomberg, adding that the company was considering whether to appeal further. Following yesterday’s ruling, turning to the US Supreme Court is BP’s only appeal option.

Lawyers for the plaintiffs have said that BP had “buyers’ remorse” over the settlement.
**Oil spill bill**
Last month, BP updated investors on its oil spill bill alongside its first-quarter results, reporting that the total cumulative net charge for the disaster had remained flat at $42.7 billion in the first quarter. (BP share price: First-quarter profit drops 23% year-on-year) The company placed the cost of the settlement at $9.2 billion to date, up from the originally projected $7.8 billion, but warned that the final cost was likely to be “significantly higher”.
At the group’s annual general meeting in April, BP faced an investor backlash over the settlement with shareholders criticising the company for striking a deal with the US government that had left it vulnerable to fictitious claims. (Gulf of Mexico payouts)
**As of 08:54 BST, buy BP shares at 506.00p.**
**As of 08:54 BST, sell BP shares at 505.80p.**

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals™.

0/10
Learn more
Oil Commodity Energy Energy & Power Stock Market