BP, plaintiffs reach spill $7.8 billion settlement

By Loren Steffy and Emily Pickrell

BP has reached a tentative settlement with businesses and individuals harmed by the 2010 Gulf of Mexico oil spill, officials said Friday night, delaying a trial that had been set for Monday but still leaving many legal issues unresolved.

In a statement, BP estimated that the proposed settlement would be for about $7.8 billion and would comprise two separate agreements, one to resolve economic loss claims — including $2.3 billion toward claims related to the Gulf seafood industry — and another to resolve medical claims.

The settlement negotiated by BP and an umbrella Plaintiffs Steering Committee will be paid from a $20 billion claim fund that BP set up after the disaster, the company said. The fund, established in the summer of 2010 to pay for claims by businesses hurt by the spill, already has paid out roughly $6 billion.

“The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast,” BP CEO Bob Dudley said in the statement.

BP and others involved in the accident still face civil claims from federal and state governments related to possible violation of pollution laws, and the Department of Justice is conducting a criminal investigation. Other corporate defendants — including Transocean and Halliburton — apparently have not settled with the business and individual plaintiffs.

Any deal requires the approval of U.S. District Judge Carl Barbier of New Orleans, who was set to begin a nonjury trial Monday on litigation combining civil complaints by individuals, companies and governments, and cross-claims among defendants.

In a brief order, Barbier postponed that trial indefinitely. He said the settlement will “require substantial changes to the current . . . trial plan” and that remaining parties in the case will need time to “reassess their respective positions.”

Barbier had planned to sort through scores of legal issues in the trial, the first phase of which was to apportion blame among parties.

BP’s Macondo well blew out in the Gulf of Mexico off Louisiana on April 20, 2010. Exploding oil and gas from the well destroyed the Deepwater Horizon drilling rig, killing 11 workers, and the well poured an estimated 5 million barrels of oil into the Gulf before it was capped almost three months later.

Friday night’s agreement caps a week of on-again, off-again discussion between BP’s lawyers and those representing thousands of claimants. Barbier last weekend delayed the start of the trial a week to allow both sides a chance to reach an agreement.

Transocean reacts

Transocean, which owned and operated the Deepwater Horizon but contends BP made key decisions leading up to the disaster, issued a statement saying the settlement didn’t change its positions.

“Delays or deals made by other players do not change the facts of this case, and we are fully prepared to argue the merits of our case based on those facts,” it said.

Halliburton, which cemented the well, had no immediate reaction.

Investigations concluded that multiple decisions, including design of the well, the way it was cemented and interpretation of pressure tests, all may have contributed to the blowout.

Wyn Hornbuckle, a Justice Department spokesman, issued a statement saying the government hopes the resolution of the private plaintiffs’ lawsuit “will provide swift and sure compensation to those harmed by the Deepwater Horizon oil spill.”

As to outstanding federal claims, he said, “although we remain open to a fair and just settlement, we are fully prepared to try the case.”

Other settlements

Several companies already have reached partial or complete settlements.

Weatherford International, which provided the float collar used in the final cementing of the well, settled with BP last year in exchange for protection against any compensatory claims, such as harm to the local economy. Barbier then dismissed its case as to any remaining claims.

MOEX Offshore 2007, a unit of Japan’s Mitsui that owned 10 percent of the Macondo well, settled with BP and with federal and state governments.

Anadarko Petroleum Corp., which owned a 25 percent share, settled with BP for compensatory claims, but still could be liable for civil penalties under the Clean Water and Oil Pollution acts.

BP reached a similar settlement with Cameron, which built the blowout preventer that sat on top of the Macondo wellhead and failed as the last line of defense against loss of well control.

loren.steffy@chron.com

emily.pickrell@chron.com


9 Comments

  1. Bubba

    Now we know why our fine publican puke of a congressman up in North Texas was grovelling to BP’s CEO, Romney’s twin. He was apologizing for that shakedown which was gonna impact how much money he would get in campaign contributions, sucking up to BP.

    #1
  2. Monty Video

    $7.8bn Steffy? so you only go it wrong by a factor of two in your previous reports. About as well informed as ever!

    #2
  3. Mr. Stretcy

    And Congressman Joe Barton would call this extortion and a travesty of justice!

    #3
  4. Jerry Martin

    Guess where the money comes from to pay for this?
    Hi ho, hi ho, it’s higher gas pump prices we know.

    #4
  5. smk2000

    there must be some happy plaintiff’s lawyers celebrating today. They definitely eared some money, but not what they will get. They will probably end up donating some money to their alma mater in hopes of getting a building named after them for all the community service they’ve done.

    #5
  6. Steve Thompson

    It seems odd that the Macondo spill got so much media attention while another decades-old spill in a major metropolitan centre that was twice the size of the Exxon Valdez has still not been cleaned up as shown here:

    http://viableopposition.blogspot.com/2010/07/brooklyns-very-own-valdez-times-two.html

    #6
  7. Tommy

    That’s good to hear. Hopefully the gulf continues to rebound in terms of tourism and other industries. I know this, there has never been a better time to visit the beaches along the coasts of Mississippi, Alabama, and Florida. The beach clean-up crews have done and continue to do an excellent job in cleaning them up and they look better than ever!

    #7
  8. Scot

    Short version. I used to work for this crew.
    The Feds. and the courts, (Federal courts have many fees) get paid first.
    Last class action suit I was in as a crew working on a drill ship I saw less than ONE PENNY on the dollar owed. And yet the list of folks in line to collect money, who in fact are not the victims, but the middle men who take BP money, and never the folks who were harmed. BP is a large pot of money. and those who were not fishermen, or oil field workers or otherwise lost a dime, are in line first demanding to be paid, first. BP oil spill was bad. Our so called court system is sanctioned theft and fraud, with a Fed 5th district judges approval

    #8
  9. Were BP plaintiffs not allowed to “opt-out” of the settlement and pursue justice on their own?

    #9