BP to fight oil spill estimates, defend cleanup efforts in court

19 February 2013 21:47  [Source: ICIS news]

BP to fight oil spill estimates, defend cleanup efforts in courtHOUSTON (ICIS)--Clean Water Act penalties against BP could be reduced by a US District Court should the court reconsider the oil spill figures used in assessing fines related to the Deepwater Horizon disaster, the UK energy giant said on Tuesday as it prepares for next week’s civil trial.

BP said 3.1m bbl is the uppermost limit that should be used in calculating the per-barrel penalty, adding that the courts historically have awarded only a fraction of the statutory maximum penalty.

"That will be for Judge [Carl] Barbier to decide after the two phases of this trial," said Robert Wine, a spokesman with BP. "One thing to bear in mind is the penalties for the oil spilled range from $0-1,100/bbl, or $0-4,300/bbl if found grossly negligent – which we will contest vigorously."

The company said the government’s public estimate of 4.9m bbl of oil released from the Macondo well in April 2010 is at least 20% overstated.

In addition, BP said it prevented 810,000 bbl of oil from entering the Gulf of Mexico, an amount that should be deducted from the volume that flowed from the reservoir.

“In determining the penalty, we believe the court should consider, among other things, the fact that BP immediately stepped up and acknowledged our role in the accident,” the company said, pointing out that it has spent more than $23bn in response, cleanup and payment on claims.

“No company has done more, faster, to meet its commitment to economic and environmental restoration efforts in the wake of an industrial accident, and although the court will ultimately decide, we believe that both the statute and public policy more generally contemplate consideration of our efforts to do the right thing in determining an appropriate penalty,” it added.

BP said the court must consider the level of culpability, as well as seven other statutory penalty factors.

“The intent behind the statute is to enable courts to account for the violating company’s conduct following the violation where public policy merits such treatment,” the company said.

In response to BP’s statement, the US Department of Justice (DOJ) said it is “fully prepared” to take this case to trial.

“We intend to prove that BP was grossly negligent and that the company engaged in wilful misconduct in causing this disastrous oil spill,” said Wyn Hornbuckle, a spokesman with the DOJ.

“We are seeking civil penalties and a judgement that BP and others are liable without limitation for removal costs and natural resource damages – exposure that could amount to billions of dollars,” Hornbuckle added. “We remain as determined as ever to hold those responsible accountable.”

The DOJ did not comment on BP's assertion that the government’s public estimate of 4.9m bbl of oil released has been overstated.

BP is scheduled to appear in court on Monday for the first phase of the federal civil trial, which will focus on the causes of the Deepwater Horizon incident, as well as who should be held responsible.

The second phase will begin in September and will determine oil flow rate and quantification of oil spilled, which will be used to assess the penalty.

Previously, BP had agreed to a $4bn (€3bn) criminal settlement, as well as a $525m civil settlement for claims made by the Securities and Exchange Commission (SEC).

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

In addition, three of BP’s managers and a former engineer also face criminal charges.

Also related to the Deepwater Horizon disaster, offshore drilling company Transocean has agreed to a $1bn civil settlement and $400m criminal settlement for violation of the Clean Water Act.

($1 = €0.75)

By: Tracy Dang
+1 713 525 2653

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