BP says it should be exempt from fines over collected oil spill

The US Department of Justice has backed BP's claim that it should be exempt from penalties regarding the oil it recovered from the 2010 Deepwater Horizon spill, the company said Tuesday in a statement ahead of its trial.

The US Department of Justice has backed BP's claim that it should be exempt from penalties regarding the oil it recovered from the 2010 Deepwater Horizon spill, the company said Tuesday in a statement ahead of its trial.

The oil giant faces court next Monday for its role in the explosion of its Gulf of Mexico well which killed 11 men.

BP will defend itself against charges of gross negligence at the US District Court for the Eastern District of Louisiana.

"This was a tragic accident, resulting from multiple causes and involving multiple parties. We firmly believe we were not grossly negligent," Rupert Bondy, Group General Counsel of BP, said.

The first phase of the trial will focus on the causes of the accident, who should be held responsible, and to what degree. The second will deal with penalties in relation to the amount of oil spilled.

Bondy said the government's public estimate of 4.9m barrels of oil released was at least 20% overstated.

The company believes it should be excluded from 810,000 barrels of oil that was captured from the Macondo reservoir, which could potentially reduce its final fine by as much as $3.5bn.

"Under the Clean Water Act, civil penalties are assessed only on oil that has actually entered the environment and potentially caused harm," the group said.

"The US Department of Justice has indicated that it agrees with BP's position on this issue.

"BP believes that a figure of 3.1 million barrels should be the uppermost limit of the number of barrels spilled that should be used in calculating a Clean Water Act penalty."

While BP said it was willing to take responsibility for its part in the accident, it will defend itself against certain claims.

Bondy highlighted the group's efforts in paying settlements to partners, contractors, the Public Service Commission and the US federal government.

Just last month BP agreed to pay $4.0bn over a period over five years during which time it will serve probation, the Louisiana court heard.

"Our actions show that we have been willing to settle," he said, adding that "there are remaining claims which we have been unable to settle on reasonable terms. Consequently, we are prepared to go to trial and present our case to Judge Barbier".

RD

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021