BP agreement on Gulf oil spill imminent: analyst

LONDON — British Petroleum is likely to agree next month to pay $ 2025 billion to settle all charges around the Gulf of Mexico oil spill, according to a leading analyst, double the figure the company has set aside and more than other analysts expect.

BP and the U. S. Department of Justice have been silent on the progress of talks on a settlement. Sources close to the matter say a deal remains uncertain over BP’S role in the Deepwater Horizon rig blast, which killed 11 workers and caused the worst offshore oil spill in U. S. history.

However, Martijn Rats, head of European oil research at Morgan Stanley — the top- ranked firm for oil and gas research in the Thomson Reuters Extel awards last year — said he saw a 70- to 80- per- cent chance the sides would agree a deal on civil and criminal charges within weeks.

He predicts in a research note that an agreement sometime between BP’S full- year results on Feb. 7 and the scheduled start of legal hearings in New Orleans on Feb. 27.

BP sources said talks are continuing with the department about a possible settlement and that the London- based company’s board has shifted to weekly meetings to discuss progress.

CEO Bob Dudley has said repeatedly that BP would like to settle, although not at any price. When asked about the matter by reporters on Wednesday, he declined to make any comment, saying it was a sensitive time to be discussing it. A BP spokesman on Thursday declined to comment on the likelihood or size of a settlement. The justice department also declined to comment.

BP senses the U. S. administration would like to settle the matter, not least because it is a U. S. presidential election year, the sources said, but any outcome is still seen as uncertain.

The estimated level of settlement in the Morgan Stanley note — the most detailed analysis Reuters has seen on the potential cost of the spill — is much higher than other analysts have predicted, and around double the amount BP has taken a provision for.