BP has reached an $18.7bn (£12bn) settlement agreement with the US federal government and Gulf Coast states for its role in the Deepwater Horizon spill in the Gulf of Mexico in 2010.
BP disclosed that it has reached agreements in principle with the US federal, state and local governments for a settlement of civil claims arising from the infamous Deepwater Horizon oil spill – the largest environmental disaster in US history.
BP is to pay the United States a civil penalty of $5.5bn under the Clean Water Act, which is payable over 15 years.
The oil company will also pay $7.1bn to the US federal government and the five Gulf states over a 15 year period for natural resource damages.
The settlement also includes a total of $4.9bn to be paid over 18 years for economic and other claims made by the five Gulf Coast States, and up to $1bn to be paid to resolve claims made by more than 400 local government entities.
Attorney General Loretta Lynch said the agreement reached with BP would address the accountability needed for the environmental damage caused by the company in 2010.
“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 tax payer, “ she said.
“Today, I am pleased to say that after productive discussions with BP over the previous several weeks, we have reached an agreement in principle that would justify and comprehensively address outstanding federal and state claims, including Clean Water Act civil penalties and natural resource damages.”
BP chairman Carl-Henric Svanberg said the agreement would provide some closure for the company.
“Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise,” he said.
“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.”
The 2010 spill lasted 87 days and dumped more than 4 million barrels of oil into the Gulf of Mexico.
BP and the federal government had previously reached a $4bn settlement over criminal charges stemming from the accident caused by the Deepwater Horizon.