BP pays out $4bn for Gulf of Mexico disaster

BP Exploration and Production has agreed to pay a record $4 billion in criminal fines and penalties for its conduct leading to the 2010 Deepwater Horizon disaster in the Gulf of Mexico that killed 11 people and caused the largest environmental disaster in US history

The UK oil company pleaded guilty to 11 counts of manslaughter and one count of obstruction of the US Congress, as well as violations of the US legislation related to water pollution and migratory birds.

“The $4 billion in penalties and fines is the single largest criminal resolution in the history of the US and constitutes a major achievement toward fulfilling a promise that the justice department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims,” said US attorney general Eric Holder.

“We specifically structured this resolution to ensure that more than half of the proceeds directly benefit the Gulf Coast region so that residents can continue to recover and rebuild.”

Around 60% ($2.4 billion) of the financial settlement will be spent on acquiring, restoring, preserving and conserving the marine and coastal environments, ecosystems and wildlife habitats harmed by the oil spill, which at its height was leaking more than 60,000 barrels a day into the sea.

BP, which will pay the criminal penalties in instalments over five years, still faces civil action over the accident. The US justice department has confirmed that a trial on liability matters is scheduled to begin in February 2013, during which it will seek to establish that the spill was caused by BP’s gross negligence.

BP could face billions of dollars of additional exposure in the civil lawsuit, warns the department, although the firm said it would vigorously defend itself against the remaining civil claims.

Meanwhile, in further fallout from the disaster, the US Environmental Protection Agency has suspended BP from tendering for new government contracts.