US, BP Reach $20.8 Bln Deepwater Horizon Oil Spill Settlement

(RTTNews) - BP plc (BP.L, BP_UN.TO, BP), the British oil company responsible for the 2010 Deepwater Horizon oil spill, will pay $20.8 billion for damages caused by the oil spill, Attorney General Loretta Lynch announced on Monday.

The payments will be spread out over 16 years. The deal settles claims from the US federal government and five states along the Gulf of Mexico: Alabama, Florida, Louisiana, Mississippi and Texas.

Attorney General Loretta Lynch on Monday said the settlement was "a strong and fitting response. BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region."

BP will pay the US federal government a civil penalty of $5.5 billion under the Clean Water Act (CWA). It will pay another $7.1 billion to the US federal government and the five Gulf states over 15 years for natural resource damages. This is in addition to the $1 billion already committed for early restoration.

Further, 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 to resolve claims made by more than 400 local government entities.

This ends five years of legal fighting over the worst offshore oil disaster in U.S. history that had claimed 11 lives.

The Deepwater Horizon rig that was drilling the Macondo well sank two days after the April 20, 2010 explosion and led to an oil spill of millions of gallons that impacted beaches and the fishing sector.

The well was finally capped nearly three months later on July 15, 2010. The spill is considered the largest accidental marine oil spill in the history of the petroleum industry.

The disaster sparked thousands of lawsuits against BP, as well as rig owner Transocean Ltd (RIG) and Halliburton Co (HAL). The two rig owners were also found to be negligent in the phase I trial, however, they were not as responsible as BP.