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Thursday, October 27, 2016

BP Will Pay $4.5 Billion, Plead Guilty To Criminal Charges For Oil Spill

BP Will Pay $4.5 Billion, Plead Guilty To Criminal Charges For Oil Spill

More than two years after the Deepwater Horizon drilling rig exploded in the Gulf of Mexico, causing the death of 11 workers and a massive oil spill, BP has pled guilty to criminal charges and agreed to pay $4 billion in fines to the government, the company said Thursday.

As part of the settlement, BP will also pay $525 million over three years in resolution of claims with the Securities and Exchange Commission.

The British oil company said it would increase its existing $38.1 billion charge against earnings for the spill by $3.85 billion. In total, the company will pay $4.5 billion over five years.

Furthermore, the company stated it was “prepared to vigorously defend itself against remaining civil claims.”

In the terms of resolution, BP agreed to plead guilty to 11 felony counts of misconduct or neglect of ships’ officers, related to the loss of 11 lives in the exposion of the Deepwater Horizon.

However, the settlement does not resolve  fines under the Clean Water Act, which could possibly quadruple the civil damages owed by BP if the company is charged with gross negligence under the act. The potential fine for the spill under the act is $1,100 to $4,300 per barrel spilled—$21 billion in a straight-line calculation.

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf Coast region,” said Bob Dudley, BP’s Group Chief Executive, in the news release. “From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

Thursday’s settlement represents the largest criminal penalty in U.S. history between a private enterprise and the Department of Justice, $3.2 billion over the $1.3 billion fine paid by pharmaceutical company Pfizer Inc. in 2009 for marketing fraud, Reuters reported.

“We believe this resolution is in the best interest of BP and its shareholders,” said Carl-Henric Svanberg, BP chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

In 2011, BP earned $25.7 billion in profits, and a total of $375 billion in revenues. The company’s announcement had little effect on its stock valuation—in fact, it went up one percent. BP could cover the $4 billion penalty with less than a single quarter’s profit. Here it will be paying it spread out over five years, which has a much lesser impact on quarterly profits. In other words, the fine paid by BP represents a drop in the bucket.

When the 4,593-foot pipe that channeled oil from the sea floor broke on April 20th, 2010, an estimated 4.9 million barrels of oil, and an equivalent amount of gas, spilled out into the Gulf of Mexico. The total damage from the spill remains hard to estimate, given that most of it was invisible to the eye.

Photo credit: AP/U.S. Coast Guard, File

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Copyright 2012 The National Memo
  • kanawah

    They got off cheep.

    should have been 54 Billion, or more.

    • johninPCFL

      In total, the $20B for civil compensation, plus the $4.5B for criminal fines, plus another $21B for violations of the clean water act adds up to $45.5B.

      Exxon, if I recall, paid a few hundred million.

  • grandma_grapes

    Don’t you mean the consumers will pay $4.5 billion plus legal fees for these losers?

    • johninPCFL

      So the free market really doesn’t work, then? They can’t charge more for gasoline than their competitors or they lose more money through lost business.

  • The gulf states have milked BP for years now. BP has paid people thousands of dollars for bogus claims. I know of several!

  • DukeDacat

    Good luck in ever collecting $$$
    Ask the people in Alaska how they were screwed 20 years later by Exxon and the G Bush Supreme court……………..
    Prince William Sound will never be the same

    • johninPCFL

      BP already put their money up. There is a compensation fund that receives money every year and pays it out to claims for lost livelihood and business, and for the coastal cleanup efforts.

  • So, four billion dollars (a ‘spit’ in the bucket) this would be acceptable to the families of the victims; so what is the g’ment going to do with this ‘windfall’..? Other than vote each other a raise of course. Will it go for further virgin lawsuits (you know, the ones who never caught wind of a settlement and now can not pursue).. Use the funds to assure this type of calamity may be lessened, or squirrel the money for a rainy day? What does the g’ment do with settlements like this? I don’t know. Seems settlements should be distributed to the survivors instead of some bureaucratic over-seer. But I guess we’re all in an actual, ‘I got mine, you get yours’ world.

    • johninPCFL

      The civil cases have yet to be heard. These are criminal fines (which usually go to police and courts’ operations costs), and losing a criminal case puts the victims in a much better place to collect civil damages at trial.

      • Mikey7a

        @johninPCFL Am I wrong, or are you defending these greedy corporate OIL barons, from a FOREIGN country, who destroyed American Families? Not to mention the loss of sea life in the Gulf of Mexico, the prettiest beaches in the country, AND the yet untold health issues of folks who live in the impacted areas??

        There is NO defense for BP! How our government can allow them to remain
        in business in America, is way beyond my comprehension sir!

        • johninPCFL

          I’m not sure what comment you’re replying to. BP has put cash in an account and paid business and local cleanup efforts towards the $20B they initially agreed to as a minimum civil claim, then were just assessed$4.5B for criminal fines. The clean water act violations have yet to be assessed and could be another $21B, so their total before they see any civil suit claims is $45.5B.

          BP is a foreign company with lots of American investors. Pension plans, retirement annuities, mutual funds, etc. all have investments in the energy sector, and loads of BP stock is held by your local friends and neighbors. Deciding, on the basis of emotion, that they cannot exist in the world’s largest economy has pretty drastic local consequences.

          I don’t believe that we need more wells in the gulf, more in ANWR, etc. given that our number one export right now is gasoline. But given that we are going to have drilling, we all know there are going to be accidents. The statistics say about one well in 400 will have a blowout. The blowout was foreseeable, was planned for, and the best equipment was already in place. Yeah, it didn’t work, and BP is paying for that failure. Nothing anyone can do will make it like it was, and the only mechanism we have to assess the amount of damage is the civil court system, which assesses cash penalties against those failures. So long as BP meets the obligations set on them by the courts to pay those penalties, they are performing acceptably to recompense for the accident.

          This was not a case of a snake-oil salesman killing someone with their elixir, this was an industrial accident writ large. So long as they perform to the requirements for compensation, they are OK with me.

  • they should pay every family that lost the loved ones a cool million for a year that they worked plus the years they could have worked till retirement,this should be an example to the other companies that think that they can break families and still make profits.where are famillies gonna make profit

    • GREAT They Should Be Paying More And This Country Should Go After All These Greedy Thugs That’s Screwing Up This Country And It’s People!! Let The Process Begin NOW!!!

  • These butt pirates are trying to PROFIT off the settlement!!

    I think they have forgotten the meaning of *guilt*!

  • Those families should OWN BP.

  • Oelwyn

    Show US the money.They haven’t paid a dime yet.

    • They have paid over 20 billion.

  • Let’s not forget, BP also lubed and grabbed its ankles at the request of Chicago thug politician Barrack Hussein Obama just after the oil spill to the tune of 20 billion. I wonder if our beloved Emperor would have been as aggressive if he were having to admonish his dear friends at GE or GM?

  • Has “justice” been done? Hell NO! It amounts to 3 months worth of their overall profit?! No, NO and NO again! They should feel at least a Fraction of the pain they have caused SO many people in the Gulf States, not to mention the families of those who died. How much is a human life worth?

  • Great JOB!!!! Exxon Valdez only paid ONE billion and it took 20 years! GREAT JOB Honorable President Barack Blessed Obama.

  • Dave_Stump

    BP plead guilty to criminal charges. So who is going to jail?

  • How does that affect executive compensation? Yeah I thought so.

  • nobsartist

    That is a lot less than the 20 BILLION it started out to be.

  • thats a drop in the bucket for those bastards…that dont even beging to pay for loss of life because of their neglicence and stupidity They need to pay WAY more than that !!!…still we can see tar ball all over and the loss of the inocent animals that dont have a choice but to be there…HELL NO THEY DID NOT PAY ENOUGH!!!!

  • The drill rig explosion and massive oil spill was CAUSED by BP who took shortcuts in their methods and used inferior materials, ALL FOR THE SAKE OF PROFIT. The company should be barred from drilling anywhere in the U.S. and all their property here should have been taken by the government and sold to the highest bidder to help pay for what their greed caused.

  • shawnsargent2000

    The 4.5 Billion, is a crual joke for the irreprable damage that has been done to the Gulf of Mexico.

    BP should be paying at least 80 Billion, and then another 2 Billion every year afterwards.
    In addition, they should not be allowed to drill in any waters of the United States, and all of their Gas stations in this Nation should be shut down.

  • “Pleads guilty to 11 felony counts”, no jail time. Corporations are not people and cannot be incarcerated for the deaths of 11 people, the courts aren’t even willing to hand down a monetary punishment that truthfully effects the operation of business.

  • I am so sick of all the BP ads telling how they are doing such a great job of cleaning up their huge mess and making the Gulf alive again with tourists.
    The effects of this disaster will take years to completely evaluate.

  • Ehross

    What will be the fine for the US for being responsible for the death of 1.5 Muslims in Iraq ?

    • ExPAVIC


      They should charge a fee for the service of getting rid of all those Muslims.

  • Cheney – Czar of OIL / energy dept under Bush allowed BIG OIL to get away with
    ‘ murder’ NO safe guards NO preventive measures BP Massive SPill and toxic chemicals used to ‘ clean it ‘up are NOT gone Who knows what effects that will have on our planet / environment ?

  • GOP does NOT give a rats ARSE about our planet Pollution- toxic chemicals – filthy air ?
    Yeah Dump it all we do not care !! US will pay dearly for this and I do NOT mean just money

  • marciano3rd

    The payments and settlement would not have happened if the Republicans were in power at the White House!!

    • ExPAVIC


      Yep…You’re right.

      One group of crooked old Republican will buy off the other group of crooked old Republicans cause that’s what makes them Republicans and that is why they will continue to loose elections.


    What, Not Quite Yet.

    So who and how many of the BP gang is going to jail for falsifying regulatory documentation which stated that the well head was correctly designed and functioning normally?

  • This fine is no where near large enough to act as a deterrant to future accidents. If we want companies to take safety seriously than the reprecussions have got to hurt. 4.5 billion sounds like a lot until you put it into prespective based on the compnies real earnings.

  • long-over-due-but-will-not-fix-land-and-water-priceless.!!!!

  • corporations want so bad to be considered individuals under the law? How about a little jail time for the executives and the board. Give them a taste of what being an individual is really like

  • When I sent how to stop the oil leak to the White House, Proof- big brown envelope to Ms. Broward, one in charge, in care of the President, looks like they could have sent something. They admited it could have been stopped this way from day one by a physicstist on tv. I sent it, afew days later it was stopped.

  • Who got the money? Did you know it is impossaile to permanently seal oil well in the ocean do to corrosion(salt water) and erosion ( water & earths movement)

    The wells are going to pop open like a champage cork on Hot date.No amout of money will fix that.

    Bible said the oceans will run black. Now you know why.