Tag Archives: BP Deepwater Horizon

Final Settlement: Gulf of Mexico Oil Spill

BP-logo-web

U.S. District Judge Carl Barbier in New Orleans gave his final approval April 4, 2016 to an estimated $20 billion settlement over BP’s massive 2010 oil spill. On July 2015, BP reached the $20 billion settlement with the federal government and five gulf states. The Justice Department has called it the largest environmental settlement in U.S. history as well as the largest-ever civil settlement with a single entity.  Barbier presided over a multiphase trial for the spill litigation before last summer’s settlement agreement resolved the bulk of the remaining civil claims against BP. The judge heard testimony from rig workers who survived the blast and from company executives who worked on the ill-fated drilling project off Louisiana’s coast. Barbier set the stage for the settlement when he ruled BP acted with “gross negligence” in the disaster….

In addition BP pleaded guilty in 2013 to manslaughter for the rig workers’ deaths and agreed to pay a record $4 billion in criminal fines and penalties.

In BP reached a multibillion-dollar settlement agreement with businesses and residents who claim the spill cost them money. That deal didn’t have a cap***, and a court-supervised claims administrator is still processing many of the claims.

***There is no limit on the total dollar amount of the Settlement, but BP will pay no more than $2.3 billion to compensate qualified claimants who are in the Seafood Compensation Program.

While BP has estimated that the total costs of the Settlement will be approximately $7.8 billion, there is no limit on the total amount of the Settlement (with the exception of the Seafood Compensation Program). The actual total amount paid out will depend on the number of qualified claims made, and could be higher or lower than BP’s estimate.***

Excerpts from Judge approves $20 billion settlement in gulf oil spill, Associated Press, April 4, 2016

Gross Negligence: the BP Approach to the Gulf Oil Spill

Gulf of Mexico disaster. image wikipedia

BP wants its money back — hundreds of millions of dollars of it — but a federal judge said Wednesday (Sept 24. 2014) that the oil giant must stand by the agreement it made with the companies it compensated for losses blamed on the 2010 Gulf oil spill.BP argued that a flawed funding formula enabled nearly 800 businesses to overestimate their spill-related claims.

One construction company hundreds of miles from the coast received $13.2 million, but deserved $4.8 million at most, BP said. Another company selling “animals and animal skins” was overpaid about $14 million, and about 50 others shouldn’t have been paid at all, the company said.  About 150 claimants should return a total of $185 million, and overpayments to the rest haven’t been calculated, attorney Kevin Downey argued.

U.S. District Judge Carl Barbier was not persuaded, thwarting BP’s latest attempt to control potential liabilities now approaching $50 billion.  The judge agreed weeks ago to change the compensation formula for any future payments, but ruled that a deal is a deal when it comes to the money BP has already paid out. Under that deal, claimants agreed not to sue, and BP agreed that no future court action could change their payments….

Barbier said he would rule later on the issue of compensation for cleanup workers whose chronic medical problems weren’t diagnosed until after the deal’s cutoff date of April 16, 2012. The settlement entitled cleanup workers with chronic conditions including rashes and breathing problems to receive up to $60,700 if the problems first surfaced within days of their cleanup work…

BP’s closing share price was $50.20 the day of the explosion, and fell to $22.80 in June 2010, before the well was capped. Shareholders returned after BP set aside $42 billion to cover its liabilities, reassured the financial damage was contained.  That’s no longer so clear: The judge’s ruling this month that BP showed gross negligence and willful misconduct added a new level of uncertainty around BP’s spill-related expenses, reducing its market value by $9 billion in a single day.,,BP’s total potential liabilities now include up to $18 billion in fines and penalties that could be imposed for violating federal pollution laws, and more than $27 billion BP says it has already paid to restore the coast and settle damage claims.

JANET MCCONNAUGHEY and JONATHAN FAHEY,Businesses Won’t Have to Return BP Spill, Associated Press, Sept. 24, 2014

See  also http://www.alphabetics.info/international/2012/09/12/bp-and-gross-negligence/

The Costs of Fighting Oil Pollution, the offshore oil exploration and exploitation industry

The Caribbean region including Jamaica and other Small Island Developing States lacks the resources to combat a major oil spill, delegates to a regional convention on oil spill prevention and response have been warned.  Opening the convention to discuss oil spill prevention, preparedness and response in the Gulf of Mexico, keynote speaker Christopher Cargill, Chairman of the Petroleum Corporation of Jamaica, said Jamaica and other islands in the region do not have access to vast amounts of resources to combat major oil spills of the magnitude of the BP Deepwater Horizon incident – which occurred two years ago this month in the Gulf of Mexico.

He told delegates: “We understand that the BP Deepwater Horizon incident involved 47,000 persons, 600 vessels and 120 aircraft and the responders had access to a Spill Liability Trust Fund.  The development of a mechanism for cooperation is therefore a critical part of the preparedness in the region as Jamaica and other small states will have to rely heavily on their neighbours to the north for assistance in dealing with such events. “  The objective of last week’s convention, held in Kingston, Jamaica from April 11-13th, was to further regional preparedness and cooperation to oversee the offshore oil exploration and exploitation industry and to improve oil spill response preparedness and capabilities.

This was third such forum and aimed to complete a Caribbean Multinational Authorities Matrix to aid regional plans towards the offshore oil exploration industry. The previous discussions looked at the legal and policy frame work for drilling operations and issues related to preparedness and response to pollution incidents arising from oil and gas exploration and exploitation.  According to Bertrand Smith, Director of Legal Affairs at the Maritime Authority of Jamaica (MAJ): “This meeting was important to Jamaica as we ratified the IMO Oil Pollution and Response Convention (OPRC) two years ago and are currently incorporating its provisions into national legislation to deal with discharges from oil and gas platforms, among other things.”  The convention was sponsored by the Maritime Authority of Jamaica and the Petroleum Corporation of Jamaica under the auspices of the International Maritime Organization (IMO), United Nations Environment Programme (UNEP) and the Regional Activity Centre/Regional Marine Pollution Emergency Information and Training Centre (RAC/REMPEITC).

Excerpt, Caribbean Lacks Resources to Combat Oil Spills Warns Jamaica, the Maritime Executive,  April 16, 2012