Record $4.5 billion settlement with BP in Gulf spill

US Attorney General Eric Holder announced Nov. 15 that British Petroleum (BP) has agreed to pay a record $4.5 billion in penalties and plead guilty to felony misconduct for its role in the devastation caused by the 2010 Deepwater Horizon oil spill. Holder emphasized that the settlement includes a roughly $1.25 billion criminal fine, and announced that two BP supervisors aboard the Deepwater Horizon during the spill have been charged with 23 criminal counts—including manslaughter, a result of the 11 workers killed in the April 2010 explosion. As part of the agreement, BP has agreed to plead guilty to 11 of the felonies related to the workers’ deaths, a charge of obstruction of Congress and two misdemeanors.

The deal includes payment of about $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and roughly $500 million to the Securities and Exchange Commission. Holder went on to say that the criminal investigations of BP by the Department of Justice are still ongoing and that the current criminal settlement, which still needs to be approved by a federal judge, does not include the damages sought by the government under the Clean Water Act, the Migratory Bird Act and other federal laws.

Last week the US District Court for the Eastern District of Louisiana heard arguments regarding approval of a class-action settlement agreement between BP and various individuals and businesses affected by the Deepwater Horizon incident. There, attorneys on both sides urged Judge Carl Barbier to approve the settlement agreement, under which BP is expected to pay approximately $7.8 billion.

In May Barbier signed a case management order outlining the structure for the upcoming trial of Gulf oil spill claims, scheduled for January 2013. The judge divided the trial into two phases. In phase one, or the “incident” phase, the court will address issues arising out of the various parties’ conduct leading to the incident and appropriation of their negligence. Barbier gave preliminary approval to the proposed settlement agreement earlier that month. In April BP and a group of plaintiffs’ attorneys sought Barbier’s preliminary approval on the settlement, which they had reached in March.

From Jurist, Nov. 15. Used with permission.

See our last post on the crimes of British Petroleum.

  1. BP settlement in perspective
    The Guardian reported Feb. 7 that BP has declared itself “back on the right path” following the Gulf of Mexico oil spill, with annual profits bouncing back from a $3.7 billion loss to a $25.7 billion profit.

  2. New Gulf of Mexico platform blast
    From ABC, Nov. 16:

    Ships and helicopters are searching for two oil rig workers who disappeared when an explosion rocked a gulf oil rig off the coast of Louisiana and set it on fire, Coast Guard officials said.

    Eleven other crew members were flown to hospitals, and four of them are listed in critical condition. No one has been confirmed dead. The Coast Guard said that a Black Elk Energy Co. oil and natural gas platform caught fire after workers using a torch cut a line that had 28 gallons of oil in it, causing an explosion…

    Black Elk’s CEO, John Hoffman, said that the wrong tool was used in cutting the line. Contract workers should have used a saw instead of a torch, which caught vapors and caused the blast. The workers were employees of Grand Isle Shipyard, not Black Elk, he said. All of the individuals were men.

  3. BP exec pleads not guilty to criminal charges
    Two well-site supervisors and one former executive of British Petroleum (BP)  pleaded not guilty in US federal court on Nov. 27 to criminal charges stemming from the 2010 Deepwater Horizon oil spill. The two supervisors, Robert Kaluza and Donald Vidrine, are each charged with manslaughter in connection with the death of 11 workers during the spill. Federal investigators have alleged that Kaluza and Vidrine ignored warning signs leading up to the spill. Former BP executive David Rainey is facing obstruction charges based on allegations that he lied to federal investigators to downplay the severity of the spill. All three men pleaded not guilty. Also on Nov. 29, the US Environmental Protection Agency (EPA) announced that BP would be indefinitely suspended from bidding on government contracts, saying the company’s “lack of business integrity” has disqualified them from consideration. The EPA said that it would only contract with BP again if the company shows that it “meets Federal business standards,” but it did not specify what the company must do.

    From Jurist, Nov. 29. Used with permission.

  4. Mystery sheen in Gulf of Mexico
    Officials say underwater inspections at the site of BP’s Deepwater Horizon rig disaster have failed to identify the source of a persistent sheen on the surface of the Gulf of Mexico. The Coast Guard said Tuesday that the recent inspections confirmed BP’s Macondo well remains secure and isn’t leaking any oil. However, investigators collected samples of a white, cloudy substance that appeared to be coming from several areas on the overturned rig on the sea floor. The substance is not believed to be oil. (AP, Dec. 18)