1. News Articles
  2. Related News Articles
News Article Details

BP Looks to Settle Oil Spill Claims for $15 Billion

Source: Daily Telegraph

Posted on 11 Jun 2012 by Neilson

Facebook LinkedIn Twitter Google

Oil Spill - BPBP is pushing for a $15bn (pounds 9.7bn) settlement with the American authorities to resolve all civil and criminal claims relating to the 2010 Gulf of Mexico oil spill, substantially less than the $25bn demanded by the US Department of Justice. An agreement could be reached before the Democratic convention in September, a report from the US has suggested.

BP's American chief executive, Bob Dudley, has been hindered in his efforts to turn around the company by the uncertainty surrounding the final bill for compensation.

BP has put away $37.2bn to cover the costs of the disaster at its Macondo well, in which 11 US employees were killed. Of this, $3.5bn relates to potential fines from the Department of Justice under the Clean Water Act.

However, potentially the fine could be much higher should BP be charged with gross negligence, an accusation that the company has rigorously denied.

A New Orleans court has already given its preliminary approval for a settlement with individuals and businesses affected by the incident, which BP believes will cost $7.8bn. A final "fairness hearing" on this offer is scheduled for November 8. This does not include civil claims from US federal, state and local governments.

In its settlement with the DoJ, BP will aim to complete all civil and criminal actions. Someone close to the case said BP "doesn't want it to be like OJ Simpson, where you're acquitted in one trial and then found [liable] in another," the report noted.

Not only is Mr Dudley seeking to resolve the US claims once and for all, he is also in the process of selling BP's stake in its troublesome Russian joint venture, TNKBP. BP's Russian oligarch partners in TNKBP offered to sell their stake to French oil giant Total, it emerged yesterday.

The oligarchs had insisted that they were committed to their half of the venture and were interested only in buying out BP. But Christophe de Margerie, Total's chief executive, disclosed that AAR had approached it, offering to sell.

He did not say when the approach was made, or at what price, but he said Total had rejected the offer as "too expensive". Asked about possible interest in BP's stake, Mr de Margerie said: "If BP sells on the same terms, then we have the same answer."

The news will add to speculation that BP ultimately will not sell its stake and AAR could yet be the partner to leave the venture.