BP reaches $7.8bn Gulf of Mexico oil spill settlement
05 March 2012
On March 2 BP reached an out-of-court settlement with lawyers representing thousands of individuals and businesses affected by the 2010 Gulf of Mexico oil spill. The estimated US$7.8 billion settlement claims to resolve the “substantial majority of legitimate economic loss and medical claims” related to the spill, according to BP.
The well blowout and resulting fire killed 11 on the Deepwater Horizon rig
The supermajor confirmed Saturday the cost of the proposed settlement is expected to be paid from the US$20 billion trust it established to compensate Gulf Coast residents and businesses affected by the spill.
BP also confirmed that the settlement includes US$2.3 billion specifically for seafood industry claimants, according to a statement.
US District Judge Carl Barbier, who is overseeing the litigation, said in the order that the proposed terms of a class settlement would be submitted to the court for approval, Reuters reported.
He also adjourned the first phase of the trial over the spill, which was scheduled to begin on March 5. Barbier had previously delayed the start of the trial to allow a group called the Plaintiffs' Steering Committee to continue to negotiate a settlement with BP.
“From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region, and we’ve worked hard to deliver on that commitment for nearly two years,” said BP CEO Bob Dudley.
BP CEO Bob Dudley said the group had stepped up to meet its obligations to Gulf coast communities
“The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”
The committee represents the interests of fisherman and businesses who say their livelihoods were damaged by the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent spill.
Eleven people were killed and 4.9 million barrels of oil spewed from the mile-deep Macondo oil well in by far the worst offshore US oil spill.
Further, major considerations are still unresolved, most important the fines that BP and its partners face from violating the Clean Water Act and Oil Pollution Act. Cross-claims between BP and its Macondo partner Transocean RIG also remain.
At the end of February, Transocean announced a $1 billion loss contingency associated with the Gulf of Mexico spill, which will be adjusted to reflect future developments in the case.
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