Mississippi receiving $2.2 billion in BP settlement
WLOX
(includes video of the press conference today)
BILOXI, MS (WLOX) -Mississippi will receive almost $2.2 billion in
compensation for the 2010 BP oil spill disaster in the Gulf of Mexico.
Mississippi Governor Phil Bryant made that announcement Thursday morning at
a news conference in Biloxi. He was joined by Attorney General Jim Hood,
who said the first payment of $150 million is scheduled for January 2016.
Here's a breakdown of the agreement in principle:
· Approximately $183 million in Natural Resource Damage Assessment
payments, to be paid over 15 years, which will be used primarily for
environmental restoration;
· Approximately $582 million in Clean Water Act penalties under the RESTORE
Act. These funds will be paid over 15 years and used primarily for
environmental projects, research and economic development;
· $750 million in economic damages paid over 17 years as a result of
Mississippi's own lawsuit against BP. Mississippi is scheduled to receive
a payment of $150 million in 2016 and equal yearly payments of $40
million from 2019-2033. The funds will be available for appropriation by
the Mississippi Legislature.
Here's a breakdown of the $659 Million in Early Funding:
· $112.557 million in Natural Resource Damage Assessment Early Restoration
payments;
· $106 million in early RESTORE Act payments;
· $356 million in National Fish and Wildlife Foundation payments;
· $85.168 in initial response payments.
The agreement in principle with BP also provides up to $1 billion to settle
claims in the five Gulf States between BP and local governments and other
public entities. But settlement amounts for individual governments and
public entities have not yet been determined. An announcement is expected
around July 12.
"Today is a victory for Mississippi and a victory for a treasured way of
life on the Gulf Coast," Gov. Bryant said. "We have made significant
progress since the BP disaster. Today's announcement ensures that long
lasting recovery will continue."
"We remain committed to ensuring that our coast counties and cities are
included in any settlement and treated fairly," added Attorney General Jim
Hood. "I am pleased to say we are upholding our promise." Hood continued,
"The size and scope of this settlement is the result of a successful
partnership of all the gulf states and our state agencies. Together, we
held BP accountable for the damage it caused."
The Deepwater Horizon Macondo oil well drilling platform exploded on April
20, 2010. Eleven men, including four Mississippians, were killed.
http://www.wlox.com/story/29460742/mississippi-receiving-22-billion-in-bp-settlement
BP agrees to pay Mississippi additional $1.5 billion over 17 years
BY REGINA ZILBERMINTS
Sun Herald
BILOXI -- Mississippi will receive around $1.5 billion under a settlement
between BP, the U.S. Department of Justice and the Gulf Coast states
involved in the 2010 Deepwater Horizon disaster, officials announced
Thursday.
Combined with $659 million in early funding, the state is getting about
$2.2 billion total in compensation. The $1.5 billion will be distributed
over the next 17 years with the first payment of $150 million coming in
2016.
The settlement totals $18.7 billion to Florida, Alabama, Mississippi,
Louisiana and Texas. It may be the largest settlement with a single entity
in U.S. history.
"For years we have worked diligently to pursue all legal recourse and
rightful compensation resulting from this disaster," said Mississippi Gov.
Phil Bryant in announcing the settlement. "Today is a victory for
Mississippi and a victory for a treasured way of life on the Gulf Coast."
The Deepwater Horizon Macondo oil well drilling platform exploded on April
20, 2010. Eleven men, including four Mississippians, were killed. It took
87 days to seal the well and stop oil gushing into the Gulf of Mexico.
The settlement comes toward the end of a two-year trial in Louisiana.
Testimony had wrapped up in February.
The most recent agreement is broken down into three categories:
n $183 million in Natural Resource Damage Assessment payments, over 15
years, which will be used on environmental restoration projects
n $582 million in Clean Water Act penalties under the RESTORE Act, over 15
years, which will be used for environmental projects, research and economic
development
n $750 million in economic damages, over 17 years, as a result of
Mississippi's own lawsuit against BP
The $750 million will be divided up into one $150 million payment in 2016
and then equal payments of $40 million from 2019-2033. The money will go
into the general fund to be appropriated by the legislature.
Bryant recommended the money be spent on the Coast, where the damage
occurred and state Attorney General Jim Hood agreed.
"People on the Coast deserve the money. The main impact was on the Coast,"
he said.
Hood said negotiations with BP had been ongoing but took a big leap forward
recently when they began talking directly to BP leadership rather than
attorneys.
"At that point we knew they were serious so we got serious about what we
could get," he said.
Some environmental foundations lauded the settlement.
"No monetary award can ever undo the destruction of the Deepwater Horizon
disaster. But, while we look forward to additional details, today's
agreement, the largest environmental settlement in American history,
represents a significant step toward justice for the Gulf Coast ecosystems,
economics and communities that were damaged by the disaster," said
Environmental Defense Fund president Fred Krupp.
Others, though, were more cautious.
"Although $18.7 billion is a significant sum, we have serious concerns
about how much of this money is actually going to be allocated towards
restoring the Gulf's environment and impacted communities," said a
statement from the Gulf Restoration Network. "The funds from this
settlement provide a once-in-a-lifetime opportunity to repair the Gulf in
the wake of the BP disaster and make our coasts and communities stronger
and more resilient for future generations. We must not squander this
opportunity.
This settlement is not the final step, officials said.
The agreement also provides up to $1 billion to settle claims from local
governments across the Gulf States.
In Mississippi, cities and counties cooperated to trying to acquire that
money.
The amounts of those settlements will be announced later this month.
http://www.sunherald.com/2015/07/02/6304315_bp-agrees-to-pay-mississippi-additional.html?rh=1
Mississippi to receive $1.5 billion in BP settlement
Clarion Ledger
Mississippi would receive another $1.5 billion from BP after Gulf
states and the federal government reached an "agreement in
principle" to settle litigation from the company's 2010 oil
disaster.
BP has agreed to pay $18.7 billion to Alabama, Florida, Louisiana,
Mississippi, Texas and the federal government under the agreement,
which Gov. Phil Bryant and Attorney General Jim Hood announced
Thursday.
Mississippi's $1.5 billion would be paid over 17 years, with about
half the money going to environmental restoration and other projects
on the Coast and $750 million in economic damages paid to the state
through 2033 that will be spent by the Legislature. Counting
payments BP has already made to Mississippi, the total here would be
$2.2 billion.
Louisiana would receive $6.8 billion under the agreement; Alabama,
$2.3 billion.
The agreement would also provide up to $1 billion to settle claims
from more than 400 local governments across the Gulf states, with an
announcement on those settlement amounts expected later this month,
Hood said.
"Mississippi suffered tragic losses as a result of the BP oil
spill," Bryant said. "Eleven men died, including four
Mississippians. For months we battled to protect our shorelines and
the unique ecosystems and natural resources of our beautiful Gulf
Coast from millions of gallons of oil and chemicals."
U.S. Attorney General Loretta Lynch in a statement said the
agreement would be the largest settlement with a single entity in
U.S. history. Hood noted "not too many lawyers get to negotiate a $2
billion case" for the state.
The U.S. Supreme Court on Monday refused to hear BP's challenge of a
federal court judge's ruling that the company could face up to $13.7
billion in fines, likely paving the way for the settlement. The
settlement must still be approved by U.S. District Judge Carl
Barbier.
Hood in 2013 filed lawsuits in both state and federal courts after
saying BP "refused to discuss a reasonable settlement" for the
disaster, which pumped 134 million gallons of oil into the Gulf.
"They short-cutted the system," Hood said Thursday. "They tried to
drill that well too cheap and they knew better. The federal
government held them accountable on the criminal side. Hopefully
this sends a message to other corporations and drilling companies
that those regulations are in place for a reason, to protect our
environment, to protect our people and to protect our economy.
Holding them accountable is what's most important to me."
Hood said he hopes the money provide "a shot in the arm" to the
Coast economy and state economy. He noted there is likely to be
debate -- argument -- in the Legislature on how and where to spend
the $750 million in economic damages over which it will have
control. The state will receive $150 million of that money in 2016,
then payments of $40 million a year from 2019 through 2033.
The agreement for Mississippi also includes $183 million in Natural
Resource Damage Assessment payments over 15 years for environmental
restoration and protection projects. It also includes $582 million
in Clean Water Act penalties under the federal RESTORE Act to be
paid over 15 years for environmental, research and economic
development projects.
BP CEO Bob Dudley in a statement Thursday said the agreement "will
resolve the largest liabilities remaining from the tragic accident."
He said it will "deliver a significant income stream over many years
for further restoration" and losses.
BP is projecting its oil disaster costs at more than $53 billion.
The company had to pay $4.5 billion in penalties in a criminal case
brought by the federal government and will spend at least $8.5
billion settling economic damages and medical claims brought by
private parties in hundreds of lawsuits.
http://www.clarionledger.com/story/news/2015/07/02/bp-oil-settlement/29610475/
Mississippi will receive additional $1.5 billion as part of record $18.7
billion BP settlement
Mississippi Press
Warren Kulo
July 02, 2015 at 12:20 PM
BILOXI, Mississippi -- Mississippi Gov. Phil Bryant and Attorney General
Jim Hood announced Thursday that the state will receive an additional $1.5
billion as part of a record $18.7 billion settlement between BP and the
five Gulf states impacted by the 2010 Deepwater Horizon oil spill,
according to multiple reports.
The deal must still be approved by a federal court judge. If accepted, it
would settle natural resources damage clams and economic claims by state
and local governments in Mississippi, Louisiana, Alabama and Texas.
Eleven people, including four Mississippians, were killed when the
Deepwater Horizon oil rig exploded in April 2010. The explosion sent
several miles of oil across the Gulf of Mexico and its shorelines before
the underwater well was capped a few months later.
The $1.5 billion which would be allocated to Mississippi would be paid over
a period of 17 years. The state has already received $659 million from BP,
bringing the total received by the state, if approved, to roughly $2.2
billion.
The $1.5 billion agreement calls for the state to receive $750 million in
economic damages, $582 million in Clean Water Act penalties and $182
million in Natural Resource Damage Assessment payments. The natural
resource payments and Clean Water Act penalties would be paid over 15
years, while the economic damage payments would be paid over 17 years.
Mississippi would receive $150 million in 2016 and annual payments of $40
million commencing in 2019 and running through 2033.
State officials have said some of the money would cover projects including
restoration of marshes and artificial reef habitats.
Although the total payout is larger than what BP had anticipated, the Clean
Water Act fines are less than they could have been. The payout is stretched
over enough years that the company will be able to pay investors dividends
while still maintaining the financial flexibility to pursue large projects.
Not everyone was pleased with Thursday's announcement. Raleigh Hoke of the
Gulf Restoration Network said his organization worried how much of the
money would truly go towards coastal restoration.
Jacqueline Savitz, vice president of Oceana, an ocean protection group,
said the settlement was far less than what BP should have paid.
"If the court approves this proposal, BP will be getting off easy and 'we
the people' will not be fully compensated for the natural resource damages
that we suffered," Savitz said, "and the law requires that the public is
made whole for those damages."
http://www.gulflive.com/news/index.ssf/2015/07/mississippi_will_receive_addit.html#incart_river
BP to pay $18.7 billion to federal government, 5 states to settle oil spill
claims
Mark Schleifstein
The Times-Picayune
July 02, 2015 at 10:29 AM
BP has agreed to pay $18.7 billion to Louisiana, four other states, and
the federal government to settle lawsuits filed in the aftermath of the
Deepwater Horizon disaster, which killed 11 and unleashed one of the
largest oil spills ever in 2010.
Louisiana Attorney General Buddy Caldwell announced Thursday (July 2) that
the state will receive more than $6.8 billion from the settlement,
including $5 billion for natural resource damages and $1 billion for state
economic damage.
The state also will receive as much as $787 million in Clean Water Act
penalties. BP will also pay for attorney fees and other costs associated
with the state's lawsuit, Caldwell said.
The payments, in a deal to be finalized over the next weeks and months,
will come in addition to $2 billion already received by the state under
previous settlements with BP and other companies involved in the disaster.
In all, the state will receive more than $10 billion, Caldwell said, which
he said is more than any state has received from a settlement in the past.
"Today's settlement is a game changer for Louisiana and its families," he
said.
"Nothing can bring back the lives those 11 lives lost tragically April 20,
2010," Caldwell said. "But with new technology and innovation, perhaps we
can prevent any further loss of life and protect our planet while we're at
it."
He said the specifics of the agreement are still being worked out.
U.S. Rep. Garret Graves, the former chairman of the state Coastal
Protectiion and Restoration Authority who acted as the state's trustee
during most of the negotiations with BP, said the effective result of the
settlement will be to provide the state with at least $500 million a year
for its coastal restoration master plan over the next 15 years.
Graves also said that while he could not say specifically how the proposed
settlement differed from other offers considered by the five Gulf states
since the spill, this one represented the best environmental and scientific
understanding of the effects of the spill on Louisiana. The spill resulted
in the release of 3.19 million barrels of oil into the Gulf of Mexico over
87 days in 2010.
Deal includes other Gulf states
The settlement was announced in simultaneous press conferences by Caldwell
and the attorneys general of Alabama, Florida and Mississippi. Under the
terms of the agreement, BP will make payments over 16 years.
The settlement must still be approved by U.S. District Judge Carl Barbier,
who is overseeing the majority of lawsuits stemming from the disaster. A
public comment period will be part of that process.
The U.S. Supreme Court on Monday cleared the way for the settlement by
refusing to hear a challenge by BP and Anadarko of Barbier's ruling that BP
faces up to a maximum of $13.7 billion in fines. Barbier calculated that
figure after determining the amount of oil spilled and ruling that the
company acted with gross negligence or willful misconduct. The settlement
announced Thursday includes the Clean Water Act fines Barbier would have
set.
"Five years ago we committed to restore the Gulf economy and environment
and we have worked ever since to deliver on that promise," said BP Chairman
Carl-Henric Svanberg, in a news release. "We have made significant
progress, and with this agreement we provide a path to closure for BP and
the Gulf. It resolves the company's largest remaining legal exposures,
provides clarity on costs and creates certainty of payment for all parties
involved.
"In deciding to follow this path, the Board has balanced the risks, timing
and consequences associated with many years of litigation against its wish
for the company to be able to set a clear course for the future," Svanberg
said.
"The Board therefore believes that this agreement is in the best long-term
interest of BP and its shareholders. The Board set out its position on the
dividend at the first quarter and this remains unchanged by the agreement."
http://www.nola.com/environment/index.ssf/2015/07/bp_to_pay_billion_to_settle_de.html#incart_most_shared-environment
5 things to know about the BP oil spill settlement
Jennifer Larino
The Times-Picayune
July 02, 2015 at 9:59 AM
Louisiana officials announced Thursday (July 2) BP has agreed to pay more
than $18.7 billion to settle federal, state and local government claims
related to the 2010 Gulf of Mexico oil spill.
The settlement closes the book on years of litigation and opens a pathway
for billions of dollars to flow into coastal restoration and other projects
in Louisiana and along the Gulf Coast.
Here are five things we know about the BP settlement right now.
1. Louisiana will receive more than $6.8 billion to settle its state
claims. This sum includes $5 billion for natural resource damages, a
minimum $787 million share of the environmental fines BP must pay under the
federal Clean Water Act, and $1 billion for state economic damages,
including lost tax revenue.
2. BP's fines under the Clean Water Act total $5.5 billion, lower than the
federal government had originally sought. Federal prosecutors had sought
$13.7 billion in environmental fines -- the statutory maximum under the
Clean Water Act -- during the civil case over the oil spill.
3. Money will go to all five Gulf Coast states, though Louisiana gets the
largest share. Under the settlement, Florida gets $3.25 billion, Alabama
gets $2.3 billion, Mississippi gets $2.2 billion and Texas gets about $1
billion.
4. It's not yet clear when Louisiana will receive its first payment. Under
the terms of the agreement announced Thursday BP will make payments over
the next 16 years. But BP, the federal government, states and other parties
in the settlement still have to finalize the deal and negotiate how much
and when payments are made. Louisiana officials expect to have a final
agreement approved by the court by early 2016.
5. BP has agreed to set aside money for natural resource damages yet to be
discovered. After it has paid down the bulk of the settlement, BP will pay
$232 million to cover any further damage to the coast and the Gulf of
Mexico that could be discovered in the future. It is not yet clear how that
money would be distributed.
http://www.nola.com/politics/index.ssf/2015/07/bp_oil_spill_settlement_what_w.html
How 5 Gulf Coast States Will Divide BP Oil Spill Settlement
AP
Most of the $18.7 billion proposed settlement that BP reached over its 2010
Gulf of Mexico oil spill would go to five Gulf Coast states, if the deal is
approved by a judge. A portion of the settlement is not assigned to any
particular state. Here's how the state-specific money breaks down, with
payments to states being made over nearly two decades:
ALABAMA
Alabama would receive $2.3 billion. Gov. Robert Bentley said the settlement
would steer $1.3 billion for coastal environmental restoration. He said
some of the $1.3 billion has already been paid to the state. Another $1
billion for will go to the state's general fund as compensation from
economic damages from the spill. Bentley said that money, which equates to
$55.5 million a year, will help the cash-strapped budget, but will not
solve the state's current fiscal crisis, with lawmakers facing a $200
million deficit next year.
FLORIDA
Florida would receive $3.25 billion, with about $2 billion for economic
loss and the rest distributed throughout the state to environmental
projects such as beaches and piers.
Attorney General Pam Bondi said Florida would receive more than $400
million for economic losses in early 2016. Three-quarters of that money
would go to Triumph Gulf Coast, a trust fund set up by the Legislature, to
help the eight counties in the Florida Panhandle that were most affected by
the spill. The final 25 percent of the money would be distributed
throughout Florida by the Legislature. The remaining money would be
distributed over the next 17 years.
LOUISIANA
Louisiana would receive at least $6.8 billion, Attorney General Buddy
Caldwell said.
Caldwell said the $6.8 billion includes $5 billion for natural resources
damages, at least $787 million for civil penalties under the federal Clean
Water Act and $1 billion for economic damages caused by the oil spill. Both
the natural resources damages and Clean Water Act penalty dollars are
expected to be largely used for coastal restoration projects, wetlands and
wildlife habitat repair, and environmental rehabilitation. State lawmakers
last year agreed to use the economic damages money to refill Louisiana's
"rainy day" fund and an elderly trust fund that had been drained to plug
budget gaps.
In addition to the $6.8 billion, Louisiana also would receive a share of
$600 million BP has agreed to set aside to pay for assessing environmental
damage and other state expenses. Caldwell said that would include
reimbursement for attorneys' fees and other state litigation expenses.
MISSISSIPPI
Mississippi would receive about $2.2 billion, Gov. Phil Bryant and Attorney
General Jim Hood said. That includes $1.5 billion announced Thursday and
$659 announced previously.
Most of the $1.5 billion would go toward environmental restoration, with a
portion to economic development. The Legislature would decide how to spend
$750 million over 17 years.
The $659 million announced earlier includes payments to cover environmental
damage and other projects. The state Department of Environmental Quality
says money will cover several projects, including restoration of marshes
and artificial reef habitats, preservation of streams. The department says
about $10.4 million will be spent at Infinity Space Center, a tourist
attraction run by NASA at Stennis Space Center in Hancock County.
TEXAS
Texas would receive more than $788 million, Gov. Greg Abbott said. More
than $638 million would be used for restoration projects, Attorney General
Ken Paxton said. The remaining $150 million would compensate the state for
economic damages.
In its lawsuit against BP, Texas had argued the oil spill cost the state a
variety of tax revenues, including sales taxes, hotel occupancy taxes and
mixed beverage taxes. The suit also claimed the spill reduced revenues at
three state parks and injured, destroyed or contaminated coastal habitats
and a variety of wildlife. Officials with two centers in Texas that are
conducting research on the Gulf Coast region in the wake of the oil spill
said the settlement money would help with their work.
http://abcnews.go.com/US/wireStory/gulf-coast-states-divide-bp-oil-spill-settlement-32186905?singlePage=true
BP Agrees to Pay $18.7 Billion to Settle Deepwater Horizon Oil Spill Claims
Wall Street Journal
BP PLC agreed on Thursday to pay $18.7 billion to settle all federal and
state claims arising from the 2010 Deepwater Horizon oil spill in what U.S.
authorities called the biggest settlement ever with a corporation.
If approved by a federal judge, the deal would conclude a monumental legal
showdown over the Deepwater Horizon disaster, which killed 11 crew members
aboard the drilling rig and caused the largest offshore oil spill in U.S.
history. The agreement would avert years of litigation over the
environmental impact of the spill, which leaked millions of barrels of
crude into the Gulf and coated hundreds of miles of sensitive beaches,
marshes and mangroves.
The settlement would add at least $10 billion to the $44 billion BP has
already incurred in legal and cleanup costs, pushing its tab for the spill
higher than all the profits it has earned since 2012. But the payments
would be stretched out over 18 years at around $1.1 billion annually,
softening the blow to the company's cash flow. Much of the penalties would
likely be tax-deductible, analysts noted.
The money largely will end up in the hands of the states, which can use it
for environmental remediation and economic development.
BP shares rose nearly 5% in early trading on Thursday.
U.S. Attorney General Loretta Lynch said the payment "would justly and
comprehensively address outstanding federal and state claims, including
Clean Water Act civil penalties and natural resource damages.''
BP Chairman Carl-Henric Svanberg said in a news release that the agreement
provides "a path to closure for BP and the Gulf."
"It resolves the company's largest remaining legal exposures, provides
clarity on costs and creates certainty of payment for all parties
involved," he said.
The company had been negotiating with the states and the U.S. Justice
Department since the beginning of May under the supervision of the Federal
District Court in New Orleans, according to a person familiar with the
matter. Judge Carl Barbier, who has been presiding over the complex
litigation, must approve the deal, which is also subject to a period of
public comment.
Judge Barbier had been expected to rule soon on BP's penalties under the
Clean Water Act, in which the company faced a fine of up to $13.7 billion.
Under the new deal, BP would pay $5.5 billion in penalties under the act—by
far the largest sum ever collected under the law. It had already set aside
$3.5 billion for the pollution fines.
The company also agreed to pay $7.1 billion to the U.S. and Gulf Coast
states over 15 years to cover long-term environmental damages that are
still being assessed. In addition, it would pay $4.9 billion to resolve
economic and other claims made by the five states.
The environmental penalties, and a portion of the cash paid to states,
would likely be tax deductible, according to Tom Claps, a litigation
analyst at Susquehanna Financial Group. Fines under the Clean Water Act
aren't tax-deductible.
BP's lawyers had argued the company should pay no more than $2 billion
under the Clean Water Act, offering evidence that its massive cleanup
effort helped avert an environmental calamity and diminished its ability to
pay a big fine. The company had rejected claims from state and local
governments that sought a combined $35 billion in economic loss and
property damage, and efforts to reach a settlement in 2013 had failed.
While the settlement announced Thursday would resolve some of BP's biggest
liabilities, the litigation over the spill isn't entirely over. The company
is being sued in about 3,000 civil cases in U.S. and foreign courts, which
include complaints brought by shareholders, and has yet to set aside money
for potential costs.
BP's costs from a 2012 civil settlement with Gulf Coast residents and
businesses have continued to rise. The company's latest estimate is that it
will pay $10.3 billion, up from an initial estimate of $7.8 billion. The
deadline for filing claims was June 8.
The Deepwater Horizon drilling rig exploded on the evening of April 20,
2010, after gas seeped into the well it was working on, rocketed upward and
ignited on deck. Survivors compared the blast to a freight train smashing
into the vessel. The rig sank. Oil flowed for 87 days.
http://www.wsj.com/articles/bp-agrees-to-pay-18-7-billion-to-settle-deepwater-horizon-oil-spill-claims-1435842739
BP to Pay $18.7 Billion for Deepwater Horizon Oil Spill
NY Times
NEW ORLEANS — The federal government and the Gulf Coast
states have reached a tentative deal with the British oil
company BP for it to pay about $18.7 billion, the largest
environmental settlement in American history, to
compensate for damages from the 2010 Deepwater Horizon oil
spill, federal, state and company officials said Thursday.
An American BP subsidiary, BP Exploration and Production,
will pay at least $7.1 billion, and possibly more, to the
federal government and the states of Louisiana, Alabama,
Mississippi, Texas and Florida, for damage to natural
resources; $5.5 billion in penalties to the federal
government for violation of the Clean Water Act; $4.9
billion to the states to compensate for harm to their
economies; and up to $1 billion to more than 400 local
governments.
"This is a landmark settlement," Gov. Robert Bentley of
Alabama said at a news conference in Montgomery. "It is
designed to compensate the state for all the damages, both
environmental and economic."
The largest sums of the settlement would be paid out over
15 to 18 years, beginning a year after the settlement is
finalized in federal court. BP put the value of the
settlement at $18.7 billion, and the states gave similar
figures; the Justice Department said the total value of
the settlement could top $20 billion.
"If approved by the court, this settlement would be the
largest settlement with a single entity in American
history," Attorney General Loretta E. Lynch said in a
statement. "It would help repair the damage done to the
Gulf economy, fisheries, wetlands and wildlife; and it
would bring lasting benefits to the Gulf region for
generations to come."
BP had already agreed to pay more than $4 billion in
criminal fines in aplea agreement over the spill. The
company had also reported spending $14 billion in a
three-month effort to contain the spill, which left much
of the American public spellbound, as news channels
broadcast images of the oil escaping the underwater well
hour after hour, and of tar fouling Gulf Coast beaches.
In all, the company said it will incur more than $40
billion in costs related to the spill.
The Deepwater Horizon rig, leased by BP and positioned
less than 50 miles southeast of the tip of Louisiana,
exploded and caught fire on April 20, 2010, killing 11
workers, and then sank. Oil continued to gush from the
ruptured well on the seabed until it was capped in July.
Over the course of a two-year trial in New Orleans, the
Justice Department had argued that under the Clean Water
Act, BP should pay the maximum federal penalty of $13.7
billion, or $4,300 for every barrel of oil spilled, while
BP had only set aside about a quarter of that amount for
fines in the civil trial.
Testimony in the final phase of the federal government's
civil suit ended in February, and both sides had been
awaiting a decision as settlement negotiations continued.
The separate lawsuits filed by the states were scheduled
to begin going to trial next year.
In deciding to settle the cases, BP's board "has balanced
the risks, timing and consequences associated with many
years of litigation against its wish for the company to be
able to set a clear course for the future," Carl-Henric
Svanberg, the company's chairman, said in a statement.
Federal prosecutors had argued that BP deserved the most
severe penalties because the spill was the most serious
American offshore oil leak in history, and that a big fine
would serve as a deterrent to oil companies.
In court and on television commercials that blanketed the
airwaves, BP highlighted its cleanup efforts aimed at
reducing the long-term environmental damage to Gulf
beaches and wildlife. The company said any fine over $2.3
billion would seriously strain the finances of its
American subsidiary, especially at a time of lower oil
prices. However, Judge Carl J. Barbier of Federal District
Court in New Orleans, who presided over the cases,
suggested that any fines could be paid over time.
The company has consistently attempted to portray itself
as something of a victim of the legal system. For years it
argued that Patrick Juneau, the compensation
administrator, was doling out excessive and fraudulent
payments to businesses and individuals who settled for
damages with the company. But in March the company halted
its legal efforts to remove Mr. Juneau. BP had estimated
that it would pay $7.8 billion to the plaintiffs, but the
final
An environmental group, Oceana, said the settlement fell
far short of what was needed, both to penalize BP and to
repair the damage to the Gulf ecosystem.
"If the court approves this proposal, BP will be getting
off easy and we the people will not be fully compensated
for the natural resource damages that we suffered," a vice
president of Oceana, Jacqueline Savitz, said. . "$18.7
billion may sound like a lot of money, and it is, but it
pales in comparison to what BP owes."
The National Audubon Society struck a more cautiously
positive tone.
"You break it, you pay for it — that's how this is
supposed to work," said David Yarnold, president and chief
executive of the group. "Now Gulf Coast restoration can
begin in earnest. It's time to heal the wounds that BP
tore in Gulf Coast ecosystems and communities."
A partner in the well, the Houston oil company Anadarko
Petroleum, meanwhile, argued that it deserved no penalty
at all since it did not operate the well and could not be
held responsible for mistakes that were made. The
government said Anadarko, which remains a major operator
in the Gulf, shared a moral responsibility as a part owner
of the well.
Officials cautioned that some details remained to be
worked out, including the exact amounts to be paid to
local government agencies, and the timing of payments. The
agreement also does not end some of the litigation brought
by private individuals and businesses over the oil spill.
http://www.nytimes.com/2015/07/03/us/bp-to-pay-gulf-coast-states-18-7-billion-for-deepwater-horizon-oil-spill.html?hp&action=click&pgtype=Homepage&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Justice Department reaches $18.7 billion agreement in principle with BP
Washington Post
The Justice Department announced Thursday an $18.7 billion agreement with
BP to settle civil claims arising from the 2010 Deepwater Horizon disaster
in the Gulf of Mexico, the worst oil spill in U.S. history.
The comprehensive agreement, the largest environmental settlement ever,
includes the largest Clean Water Act fine in history as well as addressing
other federal and state claims.
BP will pay the settlement at a rate of about $1 billion a year for 18
years, with the first payment due in two years. The London-based oil giant
said it planned to add $10 billion to the enormous $43.8 billion it had
already set aside to cover costs related to the spill.
Bob Dudley, BP's chief executive, issued a statement calling the deal "a
realistic outcome which provides clarity and certainty for all parties." He
said it would provide "a significant income stream over many years for
further restoration of natural resources and for losses related to the
spill."
Investors breathed a sigh of relief; BP's stock was up nearly 5 percent at
11 a.m. Eastern time. While the total size of BP's costs related to the
spill ended up even higher than huge amount anticipated by the company
early on, BP's ability to spread out the payments made the cost manageable
in the eyes of investors. The company's capital spending budget is
currently about $20 billion a year.
The agreement comes five years and 73 days after the blowout in mile-deep
water led to an explosion aboard the Deepwater Horizon that killed 11
people and immolated the giant rig. There had never been a blowout at such
depths, and initial efforts to shut in the well failed.
The blowout not only triggered the spill, but also a gusher of lawsuits. BP
has already paid out or agreed to pay out billions for a myriad of claims,
including$7.8 billion to private individuals and companies such as gulf
fishermen and coastal hotels and $4 billion to settle criminal charges.
"If approved by the court, this settlement would be the largest settlement
with a single entity in American history," Attorney General Loretta E.
Lynch said in a statement. "It would help repair the damage done to the
Gulf economy, fisheries, wetlands and wildlife. And it would bring lasting
benefits to the Gulf region for generations to come."
The agreement comes three days after the Supreme Court denied BP's petition
to overrule a decision by New Orleans District Court Judge Carl Barbier,
who found BP guilty of "gross negligence."
The gross negligence finding enabled the federal government to seek to
impose higher fines of as much as $4,300 a barrel for the 3.19 million
barrels spilled, instead of a $1,100 a barrel for cases where gross
negligence was not an issue. Barbier was expected to rule on the amount
shortly. In the end, the Clean Water Act fine amounted to $1,724 a barrel.
Barbier had also galvanized settlement negotiations on March 30 this year
when he ruled that Alabama could seek economic damages in lawsuits tried
before a jury, which would have led to lengthy and most likely costly
trials for BP.
The rig sank on April 22, 2010, coming to rest upside down on the muddy
floor of the gulf about 1,500 feet from the wellhead. The Macondo well
continued to gush for a total of 87 days, polluting the gulf with millions
of barrels of oil — the precise amount became the focus of furious legal
battling — before it could be capped by new hardware and shut in.
In December 2010, then-Attorney General Eric H. Holder Jr. announced a
civil lawsuit against BP and its co-defendants.
Immediately after the spill, BP sought to quickly "make things right" in
the gulf and put the incident behind it. This contrasted with Exxon Mobil's
strategy following the 1989 Exxon Valdez oil tanker accident; in that case,
Exxon Mobil litigated for two decades and ended up paying about $1 billion.
But BP's efforts to quickly tie up claims took longer than anticipated. BP
has fought in court to limit its fines under the Clean Water Act and resist
what it considers to be spurious claims from individuals who say they were
harmed by the spill. It has also sought to distribute blame for the spill
among other companies that were involved in the Macondo well, most notably
Transocean, the owner of the Deepwater Horizon rig.
Lynch hailed the department's trial team, made up of attorneys from the
Environment and Natural Resources Division and Civil Division, and said
they proved that "BP's gross negligence" resulted in the Deepwater
disaster.
The legal repercussions have been lengthy and complicated. The agreement
addresses the most critical unresolved issue to date: How much BP must pay
in Clean Water Act fines.
According to the agreement, BP will pay $5.5 billion in Clean Water Act
penalties, 80 percent of which will go to restoration efforts in five
affected gulf states. It will also pay $8.1 billion in natural resource
damages and an additional $700 million to respond to environmental damages
unknown at the time of the agreement.
BP has also agreed to pay $5.9 billion to settle claims by state and local
governments for economic damages suffered as a result of the spill, and a
total of $600 million for other claims, including for reimbursement of
damage-assessment costs.
"This unprecedented agreement is the latest in a long series of actions to
achieve justice for Gulf communities," said EPA Administrator Gina
McCarthy, whose agency worked with the Justice Department to bring the
case.
While the well remained uncapped, and with a "spillcam" showing the world
how oil was flowing freely into the gulf, BP desperately sought to find a
way to ensure its corporate survival. Top BP officials met with President
Obama in the White House and pledged to set aside $20 billion in an escrow
account for civil claims and gulf restoration. In exchange, Obama said it
was important that BP remain a viable entity. That steadied the company's
sinking stock price.
This agreement is unlikely to end all legal actions associated with the
spill, but it brings to a close the litigation between the company and the
most muscular entities involved — the federal and state governments.
Still outstanding are claims associated with the Plaintiffs Steering
Committee that are being heard in a federal court in New Orleans. A
settlement outline has been reached in that case, though the final claims
were only due June 8.
In addition, the Justice Department is still pursuing claims against
Anadarko Petroleum, which owned a minority stake in the Macondo well but
which has argued that it does not share liability in the spill.
https://www.washingtonpost.com/world/national-security/justice-department-reaches-187-billion-agreement-in-principle-with-bp/2015/07/02/6fe106fc-20bd-11e5-84d5-eb37ee8eaa61_story.html?hpid=z4
Governors, DOJ cheer $18 billion BP oil spill settlement
CNN
Washington (CNN)BP has reached a historic agreement with five Gulf States
to settle the claims made against the company from the Deepwater Horizon
oil spill in 2010, resulting in the largest environmental settlement in
history.
Political figures from the states involved, as well as Attorney General
Loretta Lynch spoke out in favor of the deal Thursday morning.
"Since the Deepwater Horizon oil spill -- the largest environmental
disaster in our nation's history -- the Justice Department has been fully
committed to holding BP accountable, to achieving justice for the American
people and to restoring the environment and the economy of the Gulf region
at the expense of those responsible and not the American taxpayer," Lynch
said in a statement released by the Department of Justice.
According to a statement released by Louisiana's Gov. Bobby Jindal, the
full agreement totals approximately $18.732 billion. Of that amount,
Louisiana will receive more than $6.8 billion from the settlement, bringing
the state's total recovery from the disaster to approximately $10 billion.
"Five years ago my administration committed to holding BP accountable for
the Deepwater Horizon disaster. Today, through extensive coordination with
the Attorney General's office and the State's coastal authorities, we've
made good on that promise," Jindal said.
Mississippi Gov. Phil Bryant announced Mississippi's compensation over
Twitter, which according to his tweet will amount to around $2.2 billion.
Alabama will receive approximately $2.3 billion according to Gov. Robert
Bentley's twitter. The tweets state the money will be used to facilitate
coastal restoration projects and cover statewide economic damages Alabama
suffered.
"If approved by the court, this settlement would be the largest settlement
with a single entity in American history; it would help repair the damage
done to the Gulf economy, fisheries, wetlands and wildlife; and it would
bring lasting benefits to the Gulf region for generations to come," Lynch
said.
Although the agreement was announced on Thursday, it is still not
finalized. The Deepwater Horizon oil spill was the largest environmental
disaster in the United States' history. Eleven people were killed, and in
November 2012, BP pleaded guilty to 11 felony manslaughter charges, as well
as environmental crimes and obstruction of Congress. BP was sentenced to
paying $4 billion from the initial charges.
http://www.cnn.com/2015/07/02/politics/historic-settlement-reached-for-bp-oil-spill/index.html
Gulf states reach $18.7B settlement with BP over oil spill
Fox News
Officials in four Gulf Coast states on Thursday announced a $19 billion
settlement with BP to resolve claims in connection with the devastating
2010 oil spill, ending years of litigation.
Leaders of Florida, Alabama, Mississippi and Louisiana said the settlement
holds BP "accountable" for the Deepwater Horizon spill. The $18.7 billion
is meant in part to compensate for economic losses and natural resource
damages.
"This agreement is the result of five years of hard-fought litigation and
intense scientific research, and it provides Louisiana the coastal
restoration and compensation it needs following the Deepwater Horizon
disaster," Louisiana Attorney General Buddy Caldwell said in a statement.
The settlement money will be used to resolve the Clean Water Act penalties;
resolve natural resources damage claims; settle economic claims; and
resolve economic damage claims of local governments, according to an
outline filed in federal court Thursday morning.
In arguing against such a high penalty, BP has said its spill-related costs
already were expected to exceed $42 billion -- even without the Clean Water
Act fine. It's also unclear how much BP will end up paying under a 2012
settlement with individuals and businesses claiming spill-related losses.
Costs incurred by BP so far include an estimated $14 billion for response
and cleanup and $4.5 billion in penalties announced after a settlement of a
criminal case with the government.
In 2012, BP reached the settlement with plaintiff's lawyers over economic
and property damage claims arising from the spill. In its first-quarter
earnings report for 2015, BP said it could estimate at least a $10.3
billion cost. But it also stressed that the cost could be higher, depending
on how many legitimate claims were filed by a recently passed deadline.
Earlier this year, a federal judge in New Orleans concluded the third phase
of a civil trial pitting the oil giant against the federal government. He
had already made two key rulings: that BP acted with "gross negligence" in
the rig explosion that resulted in the spill; and that 3.19 million barrels
of oil -- nearly 134 million gallons -- spewed into the Gulf as a result.
BP had appealed both those rulings, which set the stage for the a possible
multibillion-dollar Clean Water Act penalty.
http://www.foxnews.com/politics/2015/07/02/gulf-states-reach-187b-settlement-with-bp-over-oil-spill/?intcmp=latestnews
Gulf states reach $18.7 billion settlement with BP over 2010 oil spill
USA Today
The federal government and Gulf Coast states announced a
record-setting $18.7 billion settlement with BP on Thursday that
resolves years of litigation over the 2010 Gulf of Mexico oil spill
and delivers the largest environmental settlement ever.
The settlement announcement comes as a federal judge was preparing
to rule on how much the British oil giant owed in federal Clean
Water Act penalties for its role in allowing millions of gallons of
oil to spew into the Gulf. BP was leasing the Deepwater Horizon rig
in April 2010 when it exploded and sank off the coast of Louisiana,
killing 11 crewmen and releasing some 200 million gallons of crude
into the Gulf.
The settlement includes $5.5 billion in Clean Water Act penalties
and $8.1 billion in Natural Resource Damages, which help states
reverse damage from the spill, according to the Justice Department.
A judge must approve the settlement before it is final.
Those are the highest totals ever for those federal penalties, said
David Uhlmann, former chief of the Justice Department's
Environmental Crimes Section and an environmental law professor at
the University of Michigan. It also contained another $5.9 billion
in economic claims by state and local governments.
"It's an enormous settlement resolving nearly all outstanding claims
for the Gulf oil spill," Uhlmann said "The message is absolutely
clear: companies must place far more emphasis on environmental
protection and safety than BP did prior to the Gulf oil spill."
BP had said its spill-related costs would likley exceed $42 billion,
even without the Clean Water Act fine. It's unclear how much BP will
end up paying under a 2012 settlement with individuals and
businesses claiming spill-related losses.
In a statement, Attorney General Loretta Lynch said applauded the
efforts by the legal team to bring about resolution of the case.
"If approved by the court, this settlement would be the largest
settlement with a single entity in American history," Lynch said.
"It would help repair the damage done to the Gulf economy,
fisheries, wetlands and wildlife; and it would bring lasting
benefits to the Gulf region for generations to come."
The National Audubon Society said the settlement sends an important
message.
"You break it, you pay for it – that's how this is supposed to
work," Audubon President and CEO David Yarnold said in a statement.
"Now Gulf Coast restoration can begin in earnest. It's time to heal
the wounds that BP tore in Gulf Coast ecosystems and communities."
Costs incurred by BP so far include an estimated $14 billion for
response and cleanup and $4.5 billion in penalties announced after a
settlement of a criminal case with the government.
In 2012, BP reached the settlement with plaintiff's lawyers over
economic and property damage claims arising from the spill. In its
first-quarter earnings report for 2015, BP said it could estimate at
least a $10.3 billion cost. But it also stressed that the cost could
be higher, depending on how many legitimate claims were filed by a
recently passed deadline.
Earlier this year, a federal judge in New Orleans concluded the
third phase of a civil trial pitting BP against the federal
government, finding that BP acted with "gross negligence" in the rig
explosion that resulted in the spill.
BP appealed that ruling, which set the stage for the possible
multibillion-dollar Clean Water Act penalty.
http://www.usatoday.com/story/money/business/2015/07/02/gulf-states-reach-187b-settlement--bp-over-oil-spill/29611451/
BP to Get Its Life Back After Record U.S. Settlement for Spill
Bloomberg
BP Plc is seeking a fresh start as a record $18.7 billion U.S. settlement
over its 2010 Gulf of Mexico oil spill ends five years of financial
uncertainty for the company.
Chief Executive Officer Bob Dudley, who took over in the wake of the spill
in April 2010, said he would now be able to spend more time running
operations and less dealing with the consequences of the disaster. He will
have his work cut out as the company sold about a third of its assets to
pay liabilities and its production slumped by about a million barrels a
day.
Resolution of the major liabilities came two years earlier than expected,
Brewin Dolphin Ltd. analyst Iain Armstrong said. It may benefit BP's credit
rating, Fitch Ratings said Thursday.
"They will certainly not be complaining about the payment and the terms,"
said Armstrong, an oil analyst in London who has a neutral rating on BP.
Now "there's the certainty over the amount, there's increased certainty
over covering dividends."
Investors drove up BP stock by the most in more than a year and a half
after the settlement was unveiled Thursday. BP advanced as much as 5.3
percent, the most since October 2013, and closed up 4.4 percent at 437.40
pence in London trading.
"This allows BP to manage its own financial framework with more
predictability," Dudley told a conference call in London. It "makes it much
clearer in terms of planning the future of the company and managing our
investments," he said.
The catastrophe began April 20, 2010, after a blowout at the Macondo well,
resulting in a fire at the Deepwater Horizon rig. Eleven men died in the
explosion. The well spewed oil into the Gulf of Mexico and onto shores of
five states during the 87 days it took to seal it. The spill is the worst
in U.S. history.
Public Anger
Dudley was named CEO after former boss Tony Hayward faced public anger over
his handling of the leak. Hayward apologized in June 2010 for his comment,
amid intense criticism in the wake of the spill, that he wanted his "life
back."
Numerous lawsuits followed from individuals and businesses seeking
compensation. Some of these will continue and potential payments related to
those claims are still unknown, said Aneek Haq, head of oil and gas at
Exane BNP Paribas in London.
BP will pay the federal government and states over the next 18 years. It
raises the London-based producer's total provision for the spill to $53.8
billion, about the gross domestic product of Luxembourg. Even so, the
settlement won't jeopardize BP's dividend payments or capital spending,
Dudley said.
Value Sunk
The past five years have been tough. Market value sank to $125 billion from
$185 billion. While some investors welcomed a leaner company, the loss in
value made BP an acquisition target, with Royal Dutch Shell Plc considering
a bid before taking over BG Group Plc instead in April. Production is down
and it won't be easy for Dudley to replace, Dolphin's Armstrong said. Oil's
price slump in the past year has made it even more difficult.
The company used lower prices, which cut its ability to pay a huge fine, to
"hammer the government into a payout plan that stretched out over several
years," David Berg, a Houston trial lawyer who tracked the spill litigation
but isn't involved, said by phone. "The terms of this settlement will be
easy for BP to meet. Nonetheless, the total amounts are staggering."
The 18-year payment schedule means the maximum BP will hand over each year
will be about $1.1 billion, according to the company. The figure will drop
off in the last few years, with the company paying $260 million in the
final year.
While Exane's Haq sees the stock overhang erased, fallout from the disaster
on the oil giant's broader business remains.
"The positive of course is that a material overhang for the shares has been
removed," he said. "Our concerns remain about the business portfolio where
we believe challenges still remain following years of under-investment
post-Macondo."
BP's Dudley is looking forward to focusing on investments again. "We'll get
back to running a more conventional oil and gas company," he said. "We'll
be able to spend more time in finding, producing, developing oil and gas
and products."
http://www.bloomberg.com/news/articles/2015-07-02/bp-to-get-its-life-back-after-record-u-s-settlement-for-spill
Analysis: Spill settlement closure leaves BP open to growth, takeover
Reuters
BP's $18.7 billion settlement over the 2010 Gulf of Mexico spill draws a
line under years of uncertainty to allow it to focus once again on growth
but could make it an acquisition target.
The British energy giant, whose shares are still some 35 percent below
their value before the largest offshore spill in U.S. history, still faces
headwinds from the sharp decline in oil prices and its large exposure to
Russia.
The settlement lifts a huge weight off Bob Dudley, BP's first U.S. chief
executive who was appointed leader just six months after the oil spill. He
was tasked with rebuilding a company responsible for one of the world's
worst oil spills after an explosion on the Deepwater Horizon rig killed 11
people died and has since faced an indefinable mountain of legal claims.
"For us this is closure for the major legal proceedings from the event,"
Dudley told reporters on Thursday. "This makes it much clearer in terms of
planning the future of the company and managing and phasing our
investments."
For BP, which made $3.78 billion in profit last year, putting a figure on
the spill bill will allow it to count its spare cash and start thinking
about where to spend it.
"We'll be able to spend more time on what we do well; which is finding,
producing, developing, selling products in oil and gas," Dudley said.
The news of the settlement was received with relief among investors, too
with BP shares soaring nearly 5 percent following the announcement.
"This settlement brings clarity and certainty for the future payments so
that is sort of a relief," said Jean-Pierre Dmirdjian, analyst at
London-based Liberum brokerage.
"The settlement seems to mark the end of many years of uncertainty and that
is good news. BP management can now focus entirely on operations,
especially in the current challenging environment."
BP had significantly narrowed its oil production business in the years
following the Gulf ofMexico to Russia, Azerbaijan and Iraq and, like its
peers, slashed capital expenditure this year in the face of lower oil
prices.
The settlement puts BP on solid ground that will allow it to increase its
dividend and expand, said Stephen Simko analyst at research firm
Morningstar.
"Using its newfound dry powder to address its portfolio weaknesses could go
a long way toward shoring up its outlook in the era of low oil and gas
prices," Simko said.
TARGET
BP was forced to shed over $40 billion of assets to cover the spill's clean
up and litigation costs, leading to speculation that it could be acquired
by a larger peer.
Anish Kapadia, Managing Director, International Upstream Research at Tudor,
Pickering Holt and Co investment bank said that while the settlement made
BP a more attractive acquisition, no company was likely to have the will to
invest in BP, with a market capitalization of around $120 billion.
The near halving of oil prices since last July to around $60 a barrel and
Royal Dutch Shell's (RDSa.L) $70 billion bid to buy smaller rival BG Group
had revived that speculation and the settlement could offer the clarity
needed for any deal.
"The one thing it might do is BP had always been slightly mentioned as
takeover play since its been in this trouble, and I think companies have
been slightly hesitant to make a bid while this has been hanging over it,"
said Joe Rundle, head of trading at ETX Capital.
The settlement "does clear the way for a potential bid," he added.
http://www.reuters.com/article/2015/07/02/us-bp-gulfmexico-settlement-analysis-idUSKCN0PC20R20150702
