In what is being claimed to be the largest corporate settlement of its kind in U.S. history, BP Plc has been levied a fine of more than $20 billion to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago.
This was informed by U.S. Attorney General Loretta Lynch.
BP had previously set aside $43.8 billion for criminal and civil penalties and cleanup costs and more penalties were added on to this in an agreement that was first outlined in July. The company has said its total pre-tax charge for the spill is now around $53.8 billion.
BO had earlier agreed to pay $1 billion for restoration and the total penalties that were announced by Lynch were possibly much higher than the $18.7 billion deal that was reached to this summer.
BP's shares rose nearly 3 percent in New York to $33.45 each. Investors feel that the capping liabilities could have been much larger and that the company had done well by agreeing to the investment.
In order to address and consolidate the worst offshore oil spill in U.S. history, the fine amount given by BP would be paid to the federal government, five Gulf Coast states and hundreds of municipalities over a period of 18 years and would fund environmental restoration and economic development programs.
"This agreement will launch one of the largest environmental restoration efforts the world has ever seen," Lynch said.
Five years ago the incident prompted overhaul of safety rules and emergency plans in one of the world's most prolific offshore oil basins after the spill fouled 1,300 miles of coastline and dumped more than three million barrels of crude into the sea which acutely hurt fishermen.
$7.1 billion for natural resource damages, $5.5 billion for Clean Water Act fines, and $4.9 billion in payments to states constitute the core payments that constitute the agreement.
11 workers were killed in the the fire on the Deepwater Horizon drilling rig on April 20, 2010 after the Macondo well blowout.
Federal and state officials formally filed the settlement on Monday and it should be approved by a U.S. District Court in Louisiana soon.
"The filing of the consent decree does not reflect a new settlement or any new money," BP spokesman Geoff Morrell said.
About one-fifth of the earnings base that BP had before 2010, have been eroded by the payment towards liabilities by shedding assets in the past.
Analysts are of the view that the smaller size of BP among the bigger oil majors has made it vulnerable to potential takeovers.
Earlier, BP had settled effectively all big claims from the spill that included a fund originally set at $7.8 billion to compensate individuals claiming economic harm from the spill.
Other settlements included one with contractors Transocean Ltd and Halliburton Co.
(Source:www.reuters.com)
This was informed by U.S. Attorney General Loretta Lynch.
BP had previously set aside $43.8 billion for criminal and civil penalties and cleanup costs and more penalties were added on to this in an agreement that was first outlined in July. The company has said its total pre-tax charge for the spill is now around $53.8 billion.
BO had earlier agreed to pay $1 billion for restoration and the total penalties that were announced by Lynch were possibly much higher than the $18.7 billion deal that was reached to this summer.
BP's shares rose nearly 3 percent in New York to $33.45 each. Investors feel that the capping liabilities could have been much larger and that the company had done well by agreeing to the investment.
In order to address and consolidate the worst offshore oil spill in U.S. history, the fine amount given by BP would be paid to the federal government, five Gulf Coast states and hundreds of municipalities over a period of 18 years and would fund environmental restoration and economic development programs.
"This agreement will launch one of the largest environmental restoration efforts the world has ever seen," Lynch said.
Five years ago the incident prompted overhaul of safety rules and emergency plans in one of the world's most prolific offshore oil basins after the spill fouled 1,300 miles of coastline and dumped more than three million barrels of crude into the sea which acutely hurt fishermen.
$7.1 billion for natural resource damages, $5.5 billion for Clean Water Act fines, and $4.9 billion in payments to states constitute the core payments that constitute the agreement.
11 workers were killed in the the fire on the Deepwater Horizon drilling rig on April 20, 2010 after the Macondo well blowout.
Federal and state officials formally filed the settlement on Monday and it should be approved by a U.S. District Court in Louisiana soon.
"The filing of the consent decree does not reflect a new settlement or any new money," BP spokesman Geoff Morrell said.
About one-fifth of the earnings base that BP had before 2010, have been eroded by the payment towards liabilities by shedding assets in the past.
Analysts are of the view that the smaller size of BP among the bigger oil majors has made it vulnerable to potential takeovers.
Earlier, BP had settled effectively all big claims from the spill that included a fund originally set at $7.8 billion to compensate individuals claiming economic harm from the spill.
Other settlements included one with contractors Transocean Ltd and Halliburton Co.
(Source:www.reuters.com)
