BP pays $ 20 billion to settle oil spill claims

The U. S. Justice Department and five states on Monday announced a $ 20 billion final settlement of claims arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The deal, once approved by a judge, would resolve all civil claims against BP and end five years of legal fighting over a 507- million litre spill that affected 2,100 kilometres of shoreline. It also would bind the company to a massive cleanup project in the Gulf Coast area aimed at restoring wildlife, habitat and water quality.

“BP is receiving the punishment it deserves, while also providing critical compensation for the injuries that it caused to the environment and the economy of the Gulf region,” Attorney General Loretta Lynch said.

“The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again,” Lynch said.

The settlement, filed in federal court in New Orleans, finalizes an agreement first announced in July. The next steps are a 60- day public comment period and court approval.

BP spokesman Geoff Morrell said the settlement total includes amounts previously spent or disclosed by the company, and “resolves the largest litigation liabilities remaining from the tragic accident.”

Among other requirements, BP would have to pay $ 5.5 billion in Clean Water Act penalties and nearly $ 5 billion to five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas.

The company would also be required to pay $ 8.1 billion in natural resource damages, with funds going toward Gulf restoration projects such as support for coastal wetland and fish and birds.

An additional $ 600 million would cover other costs, such as reimbursement for state of federal and state damage assessment costs. And up to $ 1 billion would go to local governments to settle claims for economic damage from the spill. BP in 2012 settled with people and businesses harmed by the spill, a deal that’s so far resulted in $ 5.84 billion in payouts.

A coalition of conservation organizations, including the National Audubon Society and the Environmental Defense Fund, praised the settlement in a joint statement.