BP may pay U.S. $25 billion for Gulf spill

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BP Plc (BP/), the operator of the Macondo well that caused the worst U.S. oil spill in the Gulf of Mexico in 2010, may reach a settlement with the U.S. for as much as $25 billion, Morgan Stanley said.

The company and the Department of Justice will probably agree on a sum of $20 billion to $25 billion before the trial scheduled to start on Feb. 27, analyst Martijn Rats said in a note published today. The figure, which includes civil charges, criminal penalties and fines under the Clean Water Act, exceeds the $12 billion that BP set aside for these costs, he said.

BP took about $40 billion in charges related to the April 20, 2010, blowout on the Deepwater Horizon rig and set up a $20 billion fund for victims of the spill. The higher-than-expected cost of a settlement will prevent BP from raising its dividend, Rats said.

The result of the trial, “would be particularly uncertain and difficult to predict,” Rats wrote in the note. “Given the large amounts involved, we believe both BP and the DoJ will find the associated risk unattractive.”

A settlement will probably come after BP announces fourth quarter results on Feb. 7, Rats said. BP has already settled with four of the six other companies involved in the spill.

20 Responses

  1. Deltachild says:

    People! Do not be deceived by the oil barons and their cronies/ BP should pay even more, they caused this irreparable harm to the nation and will never restore what has been lost.

  2. John says:

    BP pays, they raise the price of all their products and recoup it plus a little extra.

  3. Tom says:

    BP is getting ripped off…They should close all their US refineries and move them to MX or the Caribbean…

  4. Locked says:

    Just close BP and auction off their junk like Enron.

  5. Otter Patton says:

    How much will the big ears in the oval office have to pay for damage to the USA?

  6. John says:

    CAD1936 wouldn’t be satisfied with a trillion gazillion babillion dollars, BP shutting down all facilities, and all of industry leaving the United States to move to China / India where they don’t have to worry about silly things like the environment.

    I’m pretty sure that these evil O&G companies due more for Americans than any government entity in terms of creating jobs, paying taxes, and allowing you the freedom to come on blogs like this and spew your utter nonsense.

  7. shockwave says:

    Good. If you can’t do your job safely and right, it’ll cost you. Make it so it’s more expensive to take shortcuts than to do the job correctly and you’ll finally have these “too rich to care” companies following the same rulebook that the rest of Americans have to follow.

  8. CAD1936 says:

    It’s not enough! All the brains here molded by the O & G industry want to excuse that industry for all the harm it does no matter the consequences to its field workers, the general public or the environment. Many of the office employees, the executives and CEOs seem to have themselves taken many of the attitudes of a legal entity itself, one without a soul, without a heart and completely without empathy. Let anyone not agreeing with them and their holy quest for the dollar, at any cost, be damed.

  9. Jeff says:

    Give it to them in stock.

  10. Queen Mary Beth says:

    The government can use the money. Now the Obamas will be able to travel more on MY/BP’s dime.

  11. Mayflower Girl says:

    Ron Paul 2012!

  12. Gary Packwood says:

    All of this will happen again if we drill for oil IN the water and transport oil ON the water.

    The oil companies have no choices except to factor in these settlements into the cost of product.

    No need to ramp up the drama when the end game is already known.
    ::
    GP

  13. IMMORAL BP says:

    GOP thugs can only think about their stock. Well, that’s what people get for investing in a corrupt immoral company.

    Instead of whining, you should demand that companies behave in a moral ethical manner.

    If BP goes bankrupt, thank the stockholders for not demanding ethical behavior.

  14. Bob says:

    Moving Up with the Jeffersons might have more money for vacations. If I was BP they would be sticking it up their black you know what.

  15. disheveled1 says:

    Just in time for Obamas campaign war chest.

  16. ace nich says:

    Stupid. Give the $$ to the States that were affected and let them distribute according to need. Stupid to give to US gov and watch it go down a balck hole.

  17. Javi says:

    Use that money to help pay off the debt!

  18. ntangle says:

    Wondered what this news would do to the stock. Looks pretty positive in extended hrs trading.

  19. txloanguy says:

    Where does the money go? Aren’t the punitive damages Obama did to BP enough? In addition to the Gulf Millionaires due to damage claims BP still has to pay and pay and pay. Are the Feds going to ask BP to pay the microbes that scrubbed the oil away from the accident? I’m ready for this to be over.

  20. Egon says:

    Extortion.