BP agrees settlement for victims of Gulf of Mexico oil spill
Mar 3, 2012, 9:48 GMT
London - Oil giant BP has reached a 7.8-billion-dollar agreement to settle claims from tens of thousands of victims of the 2010 Gulf of Mexico oil spill, the worst in the history of the United States, the company announced in London Saturday.
The pre-trial settlement, reached after months of negotiations late Friday, came before legal proceedings against BP were due to begin in New Orleans on Monday. These have now been delayed for a second time.
'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,' BP chief Bob Dudley said.
The proposed settlement represented 'significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast,' added.
BP said the deal would benefit some 100,000 fishermen, local residents and clean-up workers whose livelihoods or health has suffered as a result of the disaster.
It expects to finance the settlement from a 20-billion-dollar compensation fund set aside for claims by individuals.
Lawyers for the plaintiffs' group, the Plaintiffs' Steering Committee, said the settlement 'does the greatest amount of good for the greatest number of people.'
BP stressed, however, that the payout was 'not an admission of liability.' It said claims made by the US government, state governments and drilling firms, remained unaffected.
'The proposed settlement does not include claims against BP made by the United States Department of Justice or other federal agencies (including under the Clean Water Act and for Natural Resource Damages under the Oil Pollution Act) or by the states and local governments,' it said.
The explosion on the Deepwater Horizon Platform in April, 2010, claimed the lives of 11 oil workers and released between 4 and 5 million barrels of crude into the Gulf of Mexico. It took 87 days to cap the leaking well.
Tony Hayward, BP's former chief executive, resigned amid a storm of protest over the incident, which seriously strained relations between the US government and the multinational company.
US President Barack Obama called the spill 'the worst environmental disaster the nation has ever faced.'
'This settlement reflects our commitment not only to the Gulf region, but also to the United States as a whole,' said Dudley, who is a US citizen.
'BP has operated in America for more than 100 years, employs nearly 23,000 people in the US, and invests more in the US than in any other country,' his statement said.
A trial in the case, due to begin on Monday, will now be delayed - for a second time - as a result of the deal, Federal Judge Carl Barbier said.
The settlement will 'likely result in a realignment of the parties,' he said in a statement. The trial was being adjourned 'in order to allow the parties to reassess their respective positions.'
The trial was due to resolve claims for damages and civil penalties arising from the spill. It will probably still go ahead in order to apportion blame for the spill among BP and its fellow defendants.
Other companies involved in the case include Transocean, the company which owned the rig, and energy firm Halliburton. All the companies are in dispute with each other over issues of liability.
BP has so far paid out 7.5 billion dollars in clean-up costs and compensation. Prior to the proposed settlement, BP had spent more than 22 billion dollars toward meeting its commitments in the Gulf, the company statement said.
It had paid out more than 8.1 billion dollars to individuals, businesses and government entities, and spent approximately 14 billion dollars on what it called 'operational response.'
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