BP PLC has lifted its total cumulative pretax charge for the 2010 Deepwater Horizon incident and oil spill by $5.2 billion to $61.6 billion after making “significant progress in resolving outstanding claims,” the firm said on July 14.
The charge includes the estimated cost of settling all outstanding business and economic loss claims under the 2012 Plaintiffs’ Steering Committee (PSC) settlement. Those are expected to be paid by 2019.
A vast majority of economic loss and property damage claims made by an estimated 85,000 plaintiffs who either opted out or were excluded from that settlement have since been settled or dismissed. The cost of the remaining claims, expected to be paid by yearend, is also included in the charge.
The firm, which expects to take an aftertax nonoperating charge of $2.5 billion in its second-quarter results, believes any further outstanding Deepwater Horizon-related claims will not have a material impact on the group’s financial performance.
BP expects to continue to use divestment proceeds to meet its Deepwater Horizon commitments. The firm last year reached agreements to settle outstanding federal, state, and local government claims (OGJ Online, Oct. 5, 2015).