BP Exploration and Production Inc. executed the agreements with the US federal government and five coastal GoM states. The agreement with the states of Alabama, Florida, Louisiana, Mississippi, and Texas also includes settlement of claims made by more than 400 local government entities.
The payments agreement calls for BPXP is to pay the United States a civil penalty of $5.5 billion under the Clean Water Act over 15 years. BPXP will pay $7.1 billion to the United States and the five Gulf states over 15 years for natural resource damages (NRD). This is in addition to the $1 billion already committed for early restoration. BPXP will also set aside an additional amount of $232 million to be added to the NRD interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement. A total of $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states, and up to $1 billion will be paid to resolve claims made by more than 400 local government entities.
The agreements in principle are subject to execution of definitive agreements. These will comprise a Consent Decree with the United States and Gulf states with respect to the civil penalty and natural resource damages, a settlement agreement with five Gulf states with respect to state and local claims for economic and property losses, and release agreements with local government entities.
The Consent Decree will be subject to public comment and final court approval.
The agreements do not cover the remaining costs of the 2012 class action settlements with the Plaintiffs’ Steering Committee for economic and property damage and medical claims.
Bob Dudley, BP’s group CEO, said: “This is a realistic outcome which provides clarity and certainty for all parties. For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs.”