BP PLC agreed to pay $7.8 billion in settlement agreements with the Plaintiffs’ Steering Committee (PSC) to resolve most of the private economic loss, property damage, and medical claims stemming from the Macondo well blowout.
The April 20, 2010, blowout trigged an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 crew members. The incident caused a massive oil spill in the Gulf of Mexico off Louisiana.
Along with motions seeking preliminary approval from a federal judge in New Orleans for the settlements, BP also requested a delay in any liability trial about remaining disputes.
PSC will not oppose the request, BP said in an Apr. 17 news release. The settlement agreements between BP and PSC stemmed from lengthy negotiations over several months.
“This settlement demonstrates BP’s continued progress in resolving significant issues related to the Deepwater Horizon accident,” said Bob Dudley, BP Group chief executive. He said the settlement provides a framework offering “those affected full and fair compensation, without waiting for the outcome of a lengthy trial process.”
Separately, PSC lawyers issued a statement saying the settlement holds BP “fully accountable.”
Meanwhile, BP still faces potential claims that could total billions of dollars from the US government, various gulf states, drilling contractor Transocean, and Halliburton Co., which provided the cementing work on the well.
BP said the settlement includes administration costs and plaintiffs’ attorneys’ fees and expenses, and is expected to be paid from a $20 billion trust fund set up to pay various costs associated with the incident.
Previously, BP spent more than $22 billion for gulf restoration. BP has paid out more than $8.1 billion to individuals, businesses, and government entities. In addition, BP has spent $14 billion on operational response.
The settlement agreements outlined Apr. 18 are consistent with terms of a proposed settlement announced during March and is not expected to result in any increase in the $37.2 billion charge, which includes the $20 billion trust, previously recorded in BP’s financial statements.
Under the economic loss agreement, there are agreed compensation protocols for the payment of economic losses and property damages. Under the medical settlement agreement, payments will be made based on a matrix for certain specified physical conditions. The settlement is not an admission of liability by BP, the company said.
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