BP faces largest fine in US history over Gulf oil spill
Oil giant is hoping to draw a line under Deepwater Horizon disaster by paying fine, but civil lawsuits are bound to follow
BP is expected to accept the largest criminal fine in US history today to resolve the investigation into the 2010 Deepwater Horizon oil rig disaster in the Gulf of Mexico.
Details of a deal with the US Justice Department (DOJ) were being hammered out yesterday with an announcement expected this afternoon, the Financial Times reports.
The settlement would mark the end of a messy chapter in relations between BP and the US government, which have nosedived since the disaster, which claimed the lives of 11 people and led to an oil spill that was only brought under control after five months.
In order for a deal to be struck BP would have to agree a statement of facts about the cause of the accident and pay a fine that is bound to open it up to further civil lawsuits.
The Wall Street Journal says the size of the fine BP will have to pay is not yet clear but the settlement could surpass the previous record $1.3bn (£820m) fine that was handed down to Pfizer for marketing fraud related to pain medication in 2009.
BP could be liable for between $5.4bn and $21bn in civil penalties under the US Clean Water Act alone. Much will depend on whether BP admits the criminal charge of gross negligence, which it has previously denied.
At stake are billions of dollars that could flow to five nations that were affected by the oil spill. BP had originally hoped to reach a global settlement with the five countries but arguments over the size of the settlement and how it should be shared has hampered progress.
Other companies involved in the disaster include Halliburton, which has always maintained it carried out its work on the Deepwater Horizon oil rig properly, and Transocean, the owner-operator of the rig.
Transocean is negotiating a $1.5bn settlement with the DOJ for its part in the environmental disaster, which would be paid out of a $2bn provision it has set aside to cover the costs of the spill.