Friday, 5 September 2014

BP could face up to $18bn in extra fines after US ruling on Gulf of Mexico spill

BP faces a total of $49bn in costs and fines for the 2010 Gulf of Mexico oil spill disaster, after a federal judge ruled the company acted with "gross negligence''.

Judge Carl Barbier concluded on Thursday that the oil company showed a "conscious disregard of known risks'' during the drilling operation and bears most of the responsibility for the blowout that killed 11 Deep water Horizon rig workers and spewed millions of barrels of oil in to the sea.

Under the federal Clean Water Act, a polluter can be forced to pay a maximum of $1,100 in civil fines per barrel of spilled oil, or up to $4,300 per barrel if the company is found grossly negligent.

The US government estimated 4.2 million barrels of oil was spilt - meaning the company is liable for $18bn of fines. That figure is in addition to BP's previous agreement to pay a record $4bn in criminal fines and penalties, plus more than $27bn in cleanup costs and compensation to people and businesses harmed by the spill.

Barbier will decide in January precisely how much BP must pay.

The company made $24bn in profits last year but could be forced again to sell off some assets to cover the additional fines, the AP news agency reported.

Eric Holder, the  said Barbier's ruling "will ensure that the company is held fully accountable for its recklessness'' and will deter others from risking environmental damage in pursuit of profit.

Barbier that BP bears 67 percent of the responsibility, Swiss-based drilling rig owner Trans ocean 30 percent, and Houston-based cement contractor Halliburton Energy Services 3 percent.

Among other things, the judge cited a misinterpreted safety test that should have warned the drilling crew that the well was in danger of blowing out.

In a statement, BP said the evidence did not meet the "very high bar'' to prove gross negligence.

The company faces another set of potential penalties, under the Oil Pollution Act of 1990, which could cost BP more than $10bn.

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