Monday, July 6, 2015

BP Settlement

Over the course of the next 18 years, British Petroleum (BP) will pay Florida $3.25 billion or more for its role in the biggest offshore spill in U.S. history. The Deepwater Horizon drilling rig in the Gulf of Mexico exploded in 2010, killing eleven men aboard and spewing crude oil from the sea floor for almost 90 days. Along with Florida, some $18.7 billion will be paid to Mississippi, Louisiana and Alabama. BP already spent $42 billion in cleanup efforts, penalties and payouts for people whose livelihoods were directly affected by the spill. For businesses and individuals, about $5 billion was paid out. The accident led to thousands of lawsuits against BP, as well as Transocean, the rig’s owner, and Halliburton, which provided contract services for the project. Last week's settlement was the largest of BP’s agreements since the spill. BP agreed in 2012 to plead guilty and pay the government $4 billion to resolve a criminal case. BP also agreed that year to pay another $525 million over allegations of understating the size of the spill. The company also reached an estimated $10.3 billion settlement with most Gulf area residents and businesses harmed by the spill who did not opt out. That deal will probably cost more because claims that haven’t been fully processed. The settlement didn’t cover banks, casinos, insurance companies and businesses or residents in large swaths of Texas and Florida. It also didn’t include shareholders or businesses blaming BP for the Obama administration’s moratorium on deep-water drilling in the Gulf following the spill. BP has increased the amount set aside to pay for the spill to $53.8 billion which may not be enough. Investors filed a securities-fraud lawsuit, claiming BP downplayed the disaster, which goes to trial next year in Texas. A class action covers investors who bought BP’s U.S. shares from a period days after the blowout. BP will ask the U.S. Court of Appeals in New Orleans this month to block them from suing as a group, which could delay the case. Investors are seeking as much as $2.5 billion, according to court filings. BP's defense seeks to deny responsibility for those damages because the U.S. government ordered and extended the drilling ban for months. See stories here-- and