BP apologises for spill after judge accepts $4bn settlement

29 January 2013 23:15  [Source: ICIS news]

(Releads and updates throughout)

US judge approves BPHOUSTON (ICIS)--BP on Tuesday expressed its regret for its role in the Deepwater Horizon explosion and oil spill, following a district judge’s approval of a $4bn (€3bn) agreement to settle federal criminal charges against the UK-based energy giant.

“Our guilty plea makes clear, BP understands and acknowledges its role in that tragedy, and we apologise – BP apologises – to all those injured and especially to the families of the lost loved ones," said Luke Keller, vice president of BP America. “BP is also sorry for the harm to the environment that resulted from the spill, and we apologise to the individuals and communities who were injured.”

At the court hearing on Tuesday, Judge Sarah Vance accepted BP’s guilty plea to 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty acts.

In its guilty plea, BP also admitted that the two highest-ranking onsite supervisors negligently caused the deaths and oil spill, and had clear indications that the Macondo well was not secure, but did not take appropriate steps to prevent the blowout, the US Department of Justice (DOJ) said.

The company also admitted that it obstructed an inquiry by Congress during the investigation, and that a senior executive provided false and misleading information about flow rate, manipulated internal estimates on oil flowing from the well and withheld data that contradicted the company’s public estimated rate of 5,000 bbl/day.

Additionally, BP admitted that the company’s engineering response teams used sophisticated methods to generate significantly higher estimates, the DOJ said.

According to the plea agreement, $2.4bn will be dedicated to restoring and preserving the marine and coastal environments, as well as improving the wetlands damaged by the oil spill. An additional $350m will be used to fund improvements in oil-spill prevention and response.

Vance noted that the fines in the plea agreement far exceed any imposed in US history, and that they were structured so that BP will feel the full brunt of the penalties, the DOJ said.

In addition, BP will be placed on five years' probation, will have to independently monitor its process-safety and risk-management programmes and retain an ethics monitor to improve its code of conduct.

“Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history,” Attorney General Eric Holder said.

“I’m pleased to note that more than half of this landmark resolution ... will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild,” he added.

The $4bn settlement is in addition to a $525m agreement that BP made with the Securities and Exchange Commission (SEC). A judge approved that settlement in December.

Separately, BP reached an economic- and property-damage settlement agreement with several people and businesses who sued the company following the spill.

In connection with the Deepwater Horizon disaster, three of BP's managers and a former engineer also face criminal charges.

In a related case, Transocean agreed in January to pay $1.4bn to settle civil and criminal charges related to the spill. A judge will consider Transocean’s guilty plea agreement on 14 February.

($1 = €0.74)

By: Tracy Dang
+1 713 525 2653

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