BP puts oil spill behind it with 7.8bn dollar settlement

BP has finally reached a settlement to resolve the majority of claims stemming from the Deepwater Horizon oil spill in April 2010.

The settlement, expected to be paid from the $20bn trust which was set up following the disaster, has been reached with the Plaintiffs' Steering Committee (PSC) and will be in the region of $7.8bn. This includes $2.3bn to resolve economic loss claims related to the Gulf of Mexico seafood industry.

"From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region, and we've worked hard to deliver on that commitment for nearly two years," said BP's Chief Executive Bob Dudley.

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"The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast."

Prior to the proposed settlement, BP had spent more than $22bn in meeting its commitments in the Gulf, the group said: it has paid out more than $8.1bn to individuals, businesses and government entities; and $14bn on "operational response".

The settlement announced today is not expected to increase the $37.2bn charge previously recorded in the company's financial statements.

"BP'scurrentexpectation is that the provision for litigationand claims, which includes the claims covered by this proposed settlement, will increase by approximately $2.1bn with no net impact to either the income or cash flow statements, because this is a settlement that is expected to be payable from the Trust," the company announced this morning.

BC