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BP Attempts to Settle Fines with United States Government

According to reports, British Petroleum is negotiating with U.S. officials to settle pollution citations over the 2010 Gulf Coast oil spill. Legal experts have said the company could be liable for as much as $17.6 billion dollars in fines. Government officials have cited the oil company with violations of the federal Clean Water Act resulting from the biggest oil spill in U.S. history. Government officials have reported they will seek to impose fines of as much as $4,300.00 for each of the 4.1 million barrels of oil spilled after the Deepwater Horizon explosion.

Sources say the company is also in settlement negations with other firms tied to the spill. The BP trial is set to begin on February 27, 2012 in New Orleans. Sources say BP and the other companies involved will face claims by business owners and residents from the region who claim the oil spill damaged their lives and property.

Legal sources say the trial is before U.S. District Judge Carl Barbier will bring together hundreds of lawsuits by fishermen, tour operators, and state and local governments. However, sources say BP is seeking to shift some of the blame and damages onto co-defendant companies which also helped drill and operate the well. Legal sources say the Clean Water Act allows the government to seek fines of $1,100.00 per barrel of oil spilled regardless of the cause. Sources say that number can rise up to $4,300.00 a barrel if a judge finds the company was grossly negligent in allowing the spill to occur.

Accordingly, when considering the potential fines resulting from the oil spill, BP is likely to feel substantial pressure to settle with the United States government. If the fine is accessed at $1,100.00 a barrel, the maximum penalty would $4.51 billion dollars. Further, a finding of gross negligence would boost that number to $17.6 billion dollars. Government officials have said that beyond the Clean Water Act, BP may have to pay an additional $10 billion in criminal fines and another $5 billion in natural resource damages payments to the U.S and the Gulf Coast states.

Reportedly, BP has already settled with Anadarko Petroleum Corp., Mitsui & Co., and Cameron International Corp. Sources say Anadarko agreed to pay $4 billion to BP, Mitsui agreed to pay $1 billion and Cameron agreed to pay $250 million. Legal sources say those settlements BP lower its reserve to cover costs related to the sinking of the rig to $37.2 billion from more than $40 billion. Legal experts say BP will probably resolve the litigation with co-defendants Transocean Ltd. and Halliburton Co before trial in order to prevent them from both pointing the finger in its direction at trial.

The Deepwater Horizon explosion resulted in hundred of lawsuits against BP, Transocean, Halliburton and Anadarko. Legal authorities say at trial the judge will determine whether BP or any of the defendants engaged in gross negligence or willful misconduct. However, the judge will not consider any criminal charges.

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