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BP To Pay $18.7bn For Deepwater Horizon Oil Spill

BP will pay a record $18.7 billion to settle claims over the Deepwater Horizon oil spill in the Gulf of Mexico.

deepwater horizon

The Deepwater Horizon oil spill killed 11 workers and polluted The Gulf of Mexico by spewing out large amounts of oil for 87 days in April 2010.

British Petroleum (BP) was operating the giant oil rig which exploded. It is still unclear whether the disaster occurred because of lack of maintenance, substandard construction equipment, or some other shortcomings.
The financial settlement with the U.S Justice Department should help close the chapter on the worst oil spill in history and for the parties involved; but not for the marine life and the Gulf of Mexico which would eternally suffer from the man made disaster.

The Sydney Morning Herald reports:

The agreement comes five years and 73 days after the blowout in mile-deep water led to an explosion aboard the Deepwater Horizon that killed 11 people and immolated the giant rig. There had never been a blowout at such depths, and initial efforts to shut in the well failed.

“If approved by the court, this settlement would be the largest settlement with a single entity in American history,” Attorney General Loretta Lynch said. “It would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife. And it would bring lasting benefits to the Gulf region for generations to come.”deepwater horizon

The rig sank on April 22, 2010, coming to rest upside down on the muddy floor of the Gulf about 1500 feet from the wellhead. The Macondo well continued to gush for a total of 87 days, polluting the gulf with millions of barrels of oil – the precise amount became the focus of furious legal battling – before it could be capped by new hardware and shut in.

The legal repercussions have been lengthy and complicated. The agreement addresses the most critical unresolved issue: How much BP must pay in Clean Water Act fines.

According to the agreement, BP will pay $US5.5 billion in Clean Water Act penalties, 80 per cent of which will go to restoration efforts in the five affected Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas. It will also pay $US8.1 billion in natural resource damages and an additional $US700 million to respond to environmental damages unknown at the time of the agreement.

BP has also agreed to pay $US5.9 billion to settle claims by state and local governments for economic damages suffered as a result of the spill, and a total of $600 million for other claims, including for reimbursement of damage assessment costs.

“This is a landmark settlement,” Alabama Governor Robert Bentley of Alabama said. “It is designed to compensate the state for all the damages, both environmental and economic.”

 

Edmondo Burr

BA Economics/Statistics
CEO
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  • Tracie L Sawyers

    I just had a discussion about this topic this morning, long distance with my mama.i was talking about what is happening in California right now and she told me that BP has settled with the Gulf Coast states. I live in Texas and she lives in Alabama. I grew up in Pensacola Florida.
    When this happened, I was heartbroken. I don’t think that any amount of money is enough or will rectify the damage to the Earth. What about Haliburton? Don’t they have responsibility as well? I am with the Native American beliefs on this, Of the Seven generations.