BP agrees $18.7bn legal settlement for Gulf of Mexico spill that killed 11 workers and spewed oil into sea for almost three months
- BP reaches settlement with all federal, state and local claims over oil spill
- The $18.7bn deal is largest settlement with single entity in U.S. history
- It includes deals with the states of Texas, Alabama, Florida and Louisiana
- The 2010 disaster killed 11 workers and spewed oil into the gulf for months
Oil giant BP has reached an $18.7billion legal settlement in the U.S. to cover the Deepwater Horizon explosion and oil spill that killed 11 workers five years ago.
The company said it would settle all federal, state and local claims for the Gulf of Mexico disaster and is the largest settlement with a single entity in American history.
The agreement is with federal authorities as well as the states of Alabama, Florida, Louisiana, Mississippi and Texas. It also covers over 400 local government bodies.
The 2010 disaster on the Gulf of Mexico's Deepwater Horizon oil rig killed 11 workers and spilled millions of barrels of oil into the sea
The money will be used to resolve the Clean Water Act penalties; resolve natural resources damage claims; settle economic claims; and resolve economic damage claims of local governments, according to an outline filed in court.
Loretta Lynch, U.S. Attorney General, said: 'If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come.'
The settlement announcement comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties.
The judge had already found that 3.19million barrels of oil - nearly 134 million gallons - spewed into the Gulf.
BP chairman Carl-Henric Svanberg said: 'Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise.
'We have made significant progress, and with this agreement we provide a path to closure for BP and the Gulf.
A massive oil sheen can be seen spilling out from the leaking oil well two months after the disaster
Pictured is a boat passing through oily waters near Breton Island in the Gulf of Mexico in June, 2010
'It resolves the company's largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved.'
The April 20, 2010, rig explosion and spill killed 11 workers and spewed oil for nearly three months onto the shorelines of several states.
Florida's Attorney General said her state's economic damages lawsuit would continue against Halliburton and Transocean.
Louisiana Attorney General Buddy Caldwell said the agreement ends litigation that could have dragged on for years, delaying the state's ability to repair and rebuild its coast and wetlands.
'Today's settlement is a game-changer for Louisiana, its communities and its families,' Mr Caldwell said. But he cautioned that it was a deal in principle only, with the finer details remaining to be worked out in a final consent decree he expected to be complete in about two months.
Louisiana received the largest share of the settlement money - about $6.8bn - and Mr Caldwell said the payments will be received over the next 16 years.
Alabama Attorney General Luther Strange called the settlement a 'home run,' and he and Govenor Robert Bentley said they believed a looming jury trial was a significant factor in reaching the settlement.
THE $18.7BILLION EXPLOSION: HOW THE DISASTER UNFOLDED
A massive plume of smoke billows up into the sky following the explosion and burning of the oil rig
April 20, 2010, RIG EXPLODES: An explosion on the Deepwater Horizon oil rig at the Macondo exploration well kills 11 workers and releases millions of barrels of crude oil into the Gulf of Mexico. The well is capped in mid-July. BP ultimately sets aside $42bn to pay for cleanup costs, damages and penalties.
November 2012, CRIMINAL CASE SETTLED: BP agrees to pay $4.5bn in fines and other penalties and pleads guilty to 14 criminal charges. The U.S. government bans BP from new federal contracts, imperiling the company's role as a top U.S. offshore oil producer and No. 1 military fuel supplier. Separately, the U.S. Department of Justice files criminal charges against three BP employees in connection with the accident.
December 2012, CLASS ACTION SETTLED: U.S. District Judge Carl Barbier gives final approval to BP's settlement with individuals and businesses claiming to have lost money and property because of the spill. BP initially estimates it will pay $7.8bn to settle more than 100,000 claims, but the dollar amount is not capped. The company later says the payout may grow substantially, in part because of payouts to many claimants who suffered no harm, and files numerous legal challenges to the agreement.
Oil is seen spilling across the water's surface following the Deepwater Horizon oil rig leak
February 2013, CIVIL TRIAL BEGINS: Officials from the federal government and several U.S. states begin facing BP in court at a three-phase civil trial over how blame should be apportioned between BP, Transocean Ltd, which owned the drilling rig, and Halliburton Co, which did cement work. Government lawyers urge Barbier to find BP grossly negligent, which could roughly quadruple the amount of fines under the U.S. Clean Water Act.
September 30, 2013, SECOND PHASE OF TRIAL BEGINS: The second phase begins to determine how much oil was spilled.
September 4, 2014, JUDGE FINDS BP BEARS MOST OF THE BLAME: Barbier finds BP 'grossly negligent' for its role in the oil spill. He assigns 67 percent of the fault to BP, 30 percent to Transocean and 3 percent to Halliburton. BP pledges to appeal.
January 15, 2015, SIZE RULING: Barbier determines that 3.19million barrels of oil spilled. The amount would be used to calculate damages.
February 24, 2015, SIZE APPEAL: BP appeals judge's ruling on size of the oil spill.
July 2, 2015, SETTLEMENT REACHED: BP agreed to pay about $18.7bn in damages for water pollution caused by the spill, settling claims with the U.S. government and Louisiana, Mississippi, Alabama, Texas and Florida.
A pelican coated in oil flaps its wings on an island in Barataria Bay, off the coast of Louisiana
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