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BP to contest US government charges of gross negligence over Macondo blowout and spill

21 February 2013

UK-based oil major BP has said it will “vigorously defend” itself against allegations in the Deepwater Horizon federal civil trial due to start in the US District Court in Louisiana on February 25. The trial is the last major hurdle in BP's efforts to move beyond the April 2010 disaster, which resulted in 11 deaths and the largest oil spill in US history.

The April 2010 disaster resulted in 11 deaths and the largest oil spill in US history.
The April 2010 disaster resulted in 11 deaths and the largest oil spill in US history.

BP accepted criminal responsibility for the disaster last November, pleading guilty to manslaughter and lying to Congress and paying $4.5bn in fines. It reached a separate $7.8bn settlement earlier last year with thousands of local individuals who suffered economic damages because of the oil disaster.

This proceeding is the first of at least two phases the Court has set for the trial. The first phase will be focused on the causes of the Macondo blowout and subsequent destruction of the Deepwater Horizon rig, who should be held responsible, and to what degree. Judge Carl J Barbier will preside over the trial, which will ultimately determine the legal and factual issues at the heart of the case, including whether BP or any other party was grossly negligent.

BP said it had tried to reach pre-trial agreement with federal and state agencies on the extent of civil damages, but the company said on February 19 that it would rather take its chances in court than continue negotiations.

"Faced with demands that are excessive and not based on reality or the merits of the case, we are going to trial," BP general counsel Rupert Bondy said in a statement.

“We have always been open to settlements on reasonable terms, failing which we have always been prepared to defend our case at trial,” Bondy said. “We have confidence in our case and in the legal team representing the company and defending our interests.”

BP said the gross negligence charge is a very high bar that the company believes cannot be met in this case. “This was a tragic accident, resulting from multiple causes and involving multiple parties. We firmly believe we were not grossly negligent,” Bondy claimed.

The company is facing up to $21bn in fines for environmental damage arising from the blowout, which leaked large quantities of crude into the Gulf of Mexico for three months before being capped.

The fines, which would be levied under the Clean Water Act, would go directly for coastal restoration in Louisiana, Mississippi, and other Gulf states. More than 40 lawyers for federal and state governments are expected to be in court on the opening date.

If the Justice Department can prove that BP was "grossly negligent" in its response to the spill, the total fine could rise to $4,300 per barrel leaked.

BP argues that the court should take into consideration the $23bn it has already spent on clean-up costs, and that it does not deserve to pay the maximum in fines under the Clean Water Act. "No company has done more, faster, to meet its commitment to economic and environmental restoration efforts in the wake of an industrial accident," Bondy said in the statement.

The second phase, due to start next September, will address the amount of oil that leaked, with BP claiming federal estimates are exaggerated by at least 20% and that at most it should be liable for 3.1m barrels of spilled oil.

The company also demanded the federal government subtract about 810,000 barrels of oil siphoned off directly from the well, without entering Gulf waters. That would shave another $3.4bn off the maximum $21bn penalty.

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