US court upholds deal as BP spill payments surge

BP’s claim that it was paying for economic losses that weren’t caused by the 2010 Deepwater Horizon oil spill has been rejected by the US court – costing the oil giant a further $9.2 billion.

Since the spill, which happened off the coast of Louisiana in the Gulf of Mexico, BP has set aside $42.7 billion as a pretext charge in anticipation for clean-up costs and the thousands of civil lawsuits being brought against it.

The company has, however, found itself subject to claims that it said were not related, one in particular being a $21m payment to a rice mill 40 miles from the coast.

BP reached an agreed settlement in 2012 with most private claimants, initially costing $7.8 billion. This figure rose when the contested claims were approved – which BP said was improper.

US district judge Carl Barbier rejected allegations that the court was misinterpreting claims and instead described how BP was aware that the terms of the settlement could produce “false positives.” 

The oil rig explosion, which caused the death of 11 workers and saw five million barrels of oil seep into nearby waters, caused an unprecedented environmental disaster – with many animal and plant species still trying to recover.

The economic costs to the region – specifically tourism and fishing – have hit BP hard, with the US court ruling the oil giant responsible for all economic losses.

The firm said it has paid out more than $12 billion in claims to government entities, local people and businesses. It also announced $3.7 billion profits for the third quarter of 2013.

Further Reading:

BP loses legal battle over 2010 oil spill compensation limits

BP contests deepwater horizon payback scheme amid fears it could run out of money

Judge criticises BP’s attempts to block compensation payouts

US courts grants suspension to BP’s deepwater horizon payments

BP announces $3.7 billion profits for third quarter of 2013