BP to pay record fine for 2010 spill

The Pak Banker - - Front Page -

HOUS­TON

BP Plc is expected to pay a record US crim­i­nal penalty and plead guilty to crim­i­nal mis­con­duct in the 2010 Deep­wa­ter Hori­zon dis­as­ter through a plea deal reached with the Depart­ment of Jus­tice (DoJ) that may be an­nounced as soon as Thurs­day, ac­cord­ing to sources fa­mil­iar with dis­cus­sions.

Three sources, who spoke to Reuters on con­di­tion of anonymity, said BP would plead guilty in ex­change for a waiver of fu­ture pros­e­cu­tion on the charges. BP con­firmed it was in "ad­vanced dis­cus­sions" with the DoJ and the Se­cu­ri­ties & Ex­change Com­mis­sion (SEC).

The talks were about "pro­posed res­o­lu­tions of all U.S. fed­eral gov­ern­ment crim­i­nal and SEC claims against BP in con­nec­tion with the Deep­wa­ter Hori­zon in­ci­dent," it said in a state­ment on Thurs­day, but added that no fi­nal agree­ments had been reached. The dis­cus­sion do not cover fed­eral civil claims, both BP and the sources said. Lon­don-based oil gi­ant BP has been locked in months-long ne­go­ti­a­tions with the U.S. gov­ern­ment and Gulf Coast states to set­tle bil­lions of dol­lars of po­ten­tial civil and crim­i­nal li­a­bil­ity claims re­sult­ing from the April 20, 2010, ex­plo­sion aboard the Deep­wa­ter Hori­zon rig. The sources did not dis­close the amount of BP's pay­ment, but one said it would be the largest crim­i­nal penalty in U.S. his­tory. That record is now held by Pfizer Inc, which paid a $1.3 bil­lion fine in 2009 for mar­ket­ing fraud re­lated to its Bex­tra pain medicine.

The deal could re­solve a sig­nif­i­cant share of the li­a­bil­ity that BP faces af­ter the ex­plo­sion killed 11 work­ers and fouled the shore­lines of four Gulf Coast states in the worst off­shore spill in U.S. his­tory. BP, which saw its mar­ket value plum­met and re­placed its CEO in the af­ter­math of the spill, still faces eco­nomic and en­vi­ron­men­tal dam­age claims sought by U.S. Gulf Coast states and other pri­vate plain­tiffs. The fine would far out­strip BP's last ma­jor set­tle­ment with the DoJ in 2007, when it payed about $373 mil­lion to re­solve three sep­a­rate probes into a deadly 2005 Texas re­fin­ery ex­plo­sion, an Alaska oil pipe­line leak and fraud for con­spir­ing to cor­ner the U.S. propane mar­ket.

The mas­sive set­tle­ment, which comes a week af­ter the U.S. pres­i­den­tial elec­tion, could ig­nite a de­bate in Congress about how funds would be shared with Gulf Coast states, de­pend­ing on how the deal is struc­tured. Congress passed a law last year that would ear­mark 80 per­cent of BP penal­ties paid un­der the Clean Wa­ter Act to the spill-hit states of Louisiana, Mis­sis­sippi, Alabama, Florida and Texas.

In an Au­gust fil­ing, the DoJ said "reck­less man­age­ment" of the Ma­condo well "con­sti­tuted gross neg­li­gence and will­ful mis­con­duct" which it in­tended to prove at a civil trial set to be­gin in New Orleans in Fe­bru­ary 2013.

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