1:12 am - Sunday November 8, 2015

US oil spill finding could cost BP $13.7bn in fines

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A US judge has said more oil spilled into the Gulf of Mexico following the deadly rig explosion in 2010 than BP estimated — a decision that could potentially cost the oil giant $13.7bn

District judge Carl Barbier ruled in New Orleans that 3.19m barrels were discharged into the Gulf after the rig explosion at BP’s Macondo well, one of America’s worst environmental disasters, that killed 11 workers.

The number is more than the 2.4m-barrel figure BP had argued for and less than the US government’s estimate of about 4.2m. The government figure could have meant $18bn in maximum penalties under the Clean Water Act.

The decision comes on the heels of BP announcing hundreds of UK job losses amid the plunging price of oil.

Penalties for the Gulf oil spill are to be determined in a trial set to open on Tuesday. In pre-trial briefs, the government has argued that the oil giant should pay as much as $4,300 per barrel spilled.

The discharge figure Judge Barbier settled on means maximum penalties could reach about $13.7bn – but he has not yet decided how much per barrel BP must pay. BP has argued that the penalties should be lower than the government is asking for, but has not offered a specific figure.

Judge Barbier’s finding came more than a year after a trial during which the judge found that BP acted with “gross negligence” in the Deepwater Horizon offshore rig blast. BP is appealing.

“Both sides presented evidence to support their cumulative flow estimates, and each mounted effective attacks on the other’s calculations,” Judge Barbier wrote. “There is no way to know with precision how much oil discharged into the Gulf of Mexico.”

Lawyers for BP argue that the company already faces costs totalling $42bn including a $14bn response and clean-up effort.

They say a low-end penalty would accomplish the Clean Water Act purposes of deterring environmentally dangerous behaviour and encouraging effective clean-up responses.

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