BP hopes guilty plea will help to draw line on Deepwater

In the largest deal of its kind in US criminal history, BP is to pay $4.5bn (£2.8bn, €3.5bn) in settlement of 14 criminal charges relating to the Deepwater Horizon explosion and oil spill in 2010.

But though the deal may not mark the end of costs associated with the Deepwater disaster, the company believes it is now in a stronger position to defend itself against the welter of civil claims – which some analysts had estimated could cost BP as much as $60bn.

In a resolution with the Department of Justice (DoJ) described by BP as ‘in the best interest of shareholders’, the company admitted responsibility for 11 deaths and for the events leading up to the ‘unprecedented environmental catastrophe’.

The company is to pay fines of $1.26bn, with a further $2.4bn going to fund “environmental restoration, preservation and conservation efforts throughout [the Gulf] region – including barrier-island creation and river diversion projects in Louisiana”.  

BP will also pay $525m in settlement of all Securities & Exchange Commission claims in instalments over three years.

As part of the resolution, BP agreed to plead guilty to 11 felony counts of misconduct or neglect of ships officers relating to 11 deaths; one misdemeanour count under the Clean Water Act; one misdemeanour count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress. BP chairman Carl-Henric Svanberg said: “[This] removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

Meanwhile, BP has been banned temporarily from involvement in new US government contracts as a result of Environmental Protection Agency action due to BP’s “lack of business integrity” over its handling of the Deepwater Horizon affair.