BP in $7.8bn deal over Gulf spill

BP has reached an estimated $7.8 billion (€5

BP has reached an estimated $7.8 billion (€5.9 billion) deal with businesses suing over the massive Gulf of Mexico oil spill in 2010.

The oil giant still faces claims by the US government, Gulf states and drilling partners.

US District Judge Carl Barbier, in an order made three days before the case had been due to go to trial, said the proposed terms of the class settlement would be submitted

He had already delayed the start of the trial to allow the Plaintiffs' Steering Committee, representing fisherman and businesses whose livelihoods they said were damaged by the explosion of the Deepwater Horizon rig and massive oil spill from the Macondo well, to negotiate.

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Lawyers for the committee, Stephen Herman and James Roy, said the settlement would compensate hundreds of thousands of victims. "It does the greatest amount of good for the greatest number of people," they said.

BP said the cost of the proposed settlement would be about $7.8 billion, including a commitment of $2.3 billion to help resolve loss claims related to the Gulf seafood industry. It said the proposed settlement was not an admission of liability and that BP would assign to the plaintiffs some of its claims against Transocean and Halliburton.

Apart from BP, which owned 65 per cent of the Macondo well, the main corporate defendants are Switzerland-based Transocean, which owned the Deepwater Horizon, and Houston-based Halliburton Co, which provided cementing services for the well. They are also suing each other. Several other companies are involved in the trial.

Eleven people were killed in the explosion on the Deepwater Horizon rig on April 20th, 2010, and 4.9 million barrels of oil spewed from the well in what was by far the worst offshore US oil spill in history.

A settlement would remove a significant portion of the complex case, but it would not put an end to BP's exposure.

The oil giant still faces claims by the US government, which is pursuing violations of the Clean Water Act and other laws, which could result in fines totalling billions of dollars. BP also faces claims from Gulf states as well as its drilling partners.

The US Justice Department said it was prepared to go to trial to hold those responsible accountable for outstanding federal claims.

"The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states," department spokesman Wyn Hornbuckle said.

Reuters