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BP receives record $4.5bn in US fines

Text by News Wires

Latest update : 2012-11-15

British oil giant BP has agreed to pay the biggest criminal fine in US history as part of a $4.5 billion (€3.5bn) settlement after pleading guilty to criminal charges relating to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

British energy giant BP said Thursday it had agreed to pay more than $4.5 billion in US fines related to the devastating 2010 Gulf of Mexico oil spill, including a record $4.0 billion to settle criminal claims.

"The aggregate amount of the resolution is approximately $4.5 billion (3.5 billion euros), with payments scheduled over a period of six years," BP said in a statement.

BP said it had agreed a resolution of all criminal claims with the US Department of Justice which includes $4.0 billion to be paid in installments over five years. It said $1.256 billion of the $4.0 billion total were for criminal fines.

It additionally agreed a resolution of all securities claims with US regulator the Securities and Exchange Commission (SEC), which includes $525 million in fines to be paid in installments over three years.

"BP today announced that it has reached agreement with the United States government, subject to court approval, to resolve all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the Deepwater Horizon accident, oil spill, and response," the statement said.

BP chief executive Bob Dudley added: "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.

"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."

The company's reputation was ravaged two and a half years ago after an explosion on the BP-leased Deepwater Horizon rig killed 11 workers and sent millions of barrels of oil spewing into the sea.

The blast on April 20, 2010, sank the rig and unleashed the biggest marine oil spill in the industry's history -- and what has widely been acknowledged to be the worst US environmental disaster ever.

As part of the resolution, BP said it had agreed to plead guilty to "11 felony counts of misconduct or neglect of ships officers relating to the loss of 11 lives." BP pleaded guilty to a total of 14 criminal charges.

"Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon."

Group chairman Carl-Henric Svanberg said the "resolution is in the best interest of BP and its shareholders."

The company added that it was "prepared to vigorously defend itself against remaining civil claims," while increasing the amount it intends to set aside to cover all compensation costs to almost $42 billion from $38.1 billion.

Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for $7.8 billion, but it must still be approved by a federal judge and does not affect claims brought by the US government.

Over the past two years, BP has so far sold non-core assets totalling more than $35 billion to help fund massive compensation costs arising from the tragedy.

Last month, BP posted bumper profits and hiked its shareholder dividend.

Net profit jumped 7.7 percent to $5.43 billion in the third quarter, or three months to September, compared to the same part of last year.

BP recently unveiled a massive strategic deal with Russian state oil firm Rosneft in an attempt to reposition itself after the Deepwater Horizon catastrophe.

Analysts believe that the Rosneft deal could lead to major exploration projects in the Arctic.

(AFP)

Date created : 2012-11-15

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